Real Estate Australia: Sydney’s only suburb where it is cheaper to buy than rent revealed

As skyrocketing interest rates collide with the rental crisis, there’s one lone Sydney suburb where it is cheaper to buy than rent. We crunched the numbers to reveal where.

There is just one Sydney suburb where it is cheaper to buy than rent. Picture: Newscorp- Daily Telegraph / Gaye Gerard

An exclusive new study has revealed there is only one Sydney suburb where it is cheaper to buy a property than rent, and its location may surprise.

The Finder analysis of the latest PropTrack data found that paying off a unit in Belrose, a northern beaches suburb popular for retirement living, is cheaper than renting by $178 per month.

The renting vs buying analysis was calculated based on the median cost minus a 20 per cent home deposit. It found it is cheaper to pay off a home than rent in only one in 10 Australian suburbs.

But with skyrocketing rental prices across the Harbour City, the data showed buying could be closer to reality than people realise.

Apartment residents could pay as little as $22 a week extra in some suburbs, including Greater Sydney, to pay off a home compared to renting.

Paying off a unit in Berkely Vale on the Central Coast would cost just $89 extra per month than renting – the price of around four cups of coffee a week.

In Western Sydney’s Regents Park, it would cost $100 a month extra to pay off a unit, based on a median price guide of $400,000.

Sydney suburbs that recorded an apartment mortgage vs rent difference under $400 per month were areas popular for immigration such as Merrylands ($278), Haymarket ($386), Camden South ($360), Lakemba ($311) and Wiley Park ($330).

Belrose could make some first homebuyers’ dreams come trun.

Korora in Coffs Harbour has topped the list in Australia, where it’s cheaper to buy than rent. Picture: Toby Zerna

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The Coffs Harbour suburb of Korora topped the national list where it is cheaper to buy than rent, with a whopping saving of $1558 per month, a difference of 299 per cent.

It’s a similar story for buying a house in South Lismore, where a mortgage would save you more than $1200 as rental demand continues.

North Lismore and Lismore also recorded cheaper monthly mortgages, compared with rents, which could reflect the ongoing impacts of the devastating floods.

Other regional towns where monthly mortgage prices are cheaper included units in Narrabri, Moree and Crestwood and houses in Broken Hill, Cobar, Woodburn, Coraki, Moree and Wellington.

Finder’s Graham Cooke.

Finder’s head of consumer research Graham Cooke said “negative gearing and favourable conditions for landlords have combined with many other factors to make Australian housing very attractive as an investment option”.

“This had already pushed mortgage payments beyond the scope of rental payments in most areas,” he said.

“Over the last 12 months, interest rate changes have widened this gap even further.

“Even though prices have come down significantly, the RBA’s cash rate bumps have resulted in ballooning mortgage costs – around $12,000 per year, in fact.

“This has meant that houses are less affordable now than before prices went down.

“The number of suburbs where renters can afford a mortgage and pay the same has plunged dramatically.”

Ben and Danielle Strauss bought a house in Lake Macquarie six years ago and have been renting in St Ives a move that has paid off for the couple.

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St Ives car salesman Ben Strauss was lucky to get into the property market six years ago before house prices as well as rents rapidly increased.

Mr Strauss, 33, and his wife Danielle, 30, bought a house in Rathmines in Lake Macquarie while continuing to rent in St Ives where they worked..

“My wife was originally from that area and we couldn’t afford to live in Sydney,” Mr Strauss said. “The plan is to move into the house in the next two years. We see a lot of growth in the Lake Macquarie area.”

The purchase was a good one for the Strauss family with the property positively geared and assisting with the higher rent they paid in Sydney.

“The house has also doubled in price now from $525,000 to $1.1m,” Mr Strauss said.

“Property up there has gone ballistic, there’s a lot of new houses also being built. You can get more for your money.

“If you want to live anywhere nice in Sydney it will cost you $3m plus. Even renting is over $1000 a week easily. Makes it hard for a majority of people.”

Zippy Financial broker Louisa Sanghera said if people were smart and bought in the right areas, they could put themselves in strong positions.

Mrs Sanghera said she would also like to see banks more open to helping people get loans who had been reliably paying high rents for years.

She said so many clients over the years had expressed frustrations about paying rents of more than $800 per week for over a decade, yet not qualifying for loans.

“It would be nice for banks to come to the table when they can see people have paid rent on time for years,” she said. “These people are showing they are not defaulters but the bank’s calculations show they don’t qualify.”

Originally published as Real Estate Australia: Sydney’s only suburb where it is cheaper to buy than rent revealed