Where it’s cheaper to buy a property than rent in Brisbane
Property prices in Brisbane’s red-hot market might be soaring but it’s still cheaper to buy than rent in dozens of budget hotspots, with a new Domain report not only revealing where bargain hunters can nab a cheap home, but where a mortgage will set you back far less than a lease.
The rent vs buy data – which crunched the numbers on median rent and mortgage costs up to December last year – further revealed the city boasts far more feasible suburbs than its major southern counterparts, with buyers able to save up to $135 a week in some Brisbane fringe suburbs.
Using weekly mortgage repayments based on the median house or unit price for the suburb, the data is based on an assumed mortgage rate of 2.48 per cent and a deposit of 20 per cent, while excluding extra costs such as council rates and transfer duties.
Based on those calculations, suburbs in and around Logan came up trumps, with houses in Woodridge offering the widest gap between mortgage repayments and rent. In that patch, the average homeowner forks out a mere $165 per week in home loan repayments, compared to $300 for the average renter.
Next on the list was Waterford, where the weekly mortgage repayment for houses is $344, compared to a weekly rent of $410. Logan Reserve ranked third with house repayments averaging $342, compared to $400 for rent.
Domain senior research analyst Dr Nicola Powell said the data set revealed just how many suburbs within Greater Brisbane were cheaper to purchase in than rent, a fact she said was further fuelled by the historic low interest rates.
“This has really aided affordability (in Brisbane) but now it’s a question of how long it will last,” Dr Powell said.
“There comes a point where low mortgage rates do elevate prices, which offsets the benefits. Despite that, I don’t think it will be the last year we will see this, but we will likely see (more) price growth and what that will do is reduce the number of suburbs that have that mortgage/rent divide.”
Property prices in Brisbane’s red-hot market might be soaring but it’s still cheaper to buy than rent in dozens of budget hotspots, with a new Domain report not only revealing where bargain hunters can nab a cheap home, but where a mortgage will set you back far less than a lease.
The rent vs buy data – which crunched the numbers on median rent and mortgage costs up to December last year – further revealed the city boasts far more feasible suburbs than its major southern counterparts, with buyers able to save up to $135 a week in some Brisbane fringe suburbs.
Using weekly mortgage repayments based on the median house or unit price for the suburb, the data is based on an assumed mortgage rate of 2.48 per cent and a deposit of 20 per cent, while excluding extra costs such as council rates and transfer duties.
Based on those calculations, suburbs in and around Logan came up trumps, with houses in Woodridge offering the widest gap between mortgage repayments and rent. In that patch, the average homeowner forks out a mere $165 per week in home loan repayments, compared to $300 for the average renter.
Next on the list was Waterford, where the weekly mortgage repayment for houses is $344, compared to a weekly rent of $410. Logan Reserve ranked third with house repayments averaging $342, compared to $400 for rent.
Domain senior research analyst Dr Nicola Powell said the data set revealed just how many suburbs within Greater Brisbane were cheaper to purchase in than rent, a fact she said was further fuelled by the historic low interest rates.
HOUSES
Suburb | weekly repayment | Weekly Rent | Difference between buying and renting |
Woodridge | $165 | $300 | -$135 |
Logan Reserve | $342 | $400 | -$58 |
Helensvale | $567 | $623 | -$56 |
Springfield Lakes | $361 | $410 | -$49 |
Centenary Heights | $309 | $350 | -$41 |
Alexandra Hills | $404 | $440 | -$36 |
Beenleigh | $313 | $348 | -$34 |
Bracken Ridge | $424 | $450 | -$26 |
Victoria Point | $448 | $470 | -$22 |
Mount Cotton | $461 | $470 | -$9 |
Strathpine | $382 | $380 | $2 |
Capalaba | $412 | $410 | $2 |
UNITS
“This has really aided affordability (in Brisbane) but now it’s a question of how long it will last,” Dr Powell said.
“There comes a point where low mortgage rates do elevate prices, which offsets the benefits. Despite that, I don’t think it will be the last year we will see this, but we will likely see (more) price growth and what that will do is reduce the number of suburbs that have that mortgage/rent divide.”
Get the best property news and advice delivered straight to your inbox.
While the days of Brisbane’s bargain abodes might be numbered, Dr Powell said the data not only revealed the number of hotspots where first-home buyers could still snap up a house for less than $300,000, but where investors looking for a positively geared property could reap far more rent.
“It’s so valuable because it allows them to do that week-by-week comparison. It also shows the number of suburbs where there’s only a $30 or $40 difference,” she said.
Some of those suburbs where a mortgage is similar to the cost of rent are Springfield Lakes – where the weekly mortgage repayment for a house averages $361 compared to $410 for rent – Strathpine in Brisbane’s north and Capalaba in the east, where the difference is a meagre $2 for houses in favour of renters, Upper Kedron, where it costs $9 more for a mortgage per week than to rent a house, and Jindalee, where the average weekly mortgage is $511 for houses or $475 for the rental equivalent.
For units, Marsden boasted the widest gap with average mortgage repayments costing just $210 per week, compared to $330 for rent.
At the other end of the spectrum, the prestigious inner-city suburb of New Farm clocked the biggest discrepancy in both houses and units, with the average mortgage repayment for houses being $1360 compared to $673 for rent, and $577 for unit repayments compared to $415 for rent.
It couldn’t be more of a contrast in the Logan region, which offers some of the city’s cheapest buys. Sales executive at Ray White Logan City, Teza Fruzande, said houses sold for as low as $260,000 in Woodridge, a suburb that’s less than a 30-minute drive from the city centre.
And buyers, he said, are catching on.
“In the last two months we’ve been dealing with a lot of people from interstate who buy (investment properties here) sight unseen … but we are also seeing more owner occupiers (because of those cheap prices),” Mr Fruzande said.
“The thing they all mutually like is the location, as Woodridge is actually surrounded by all the good areas such as Springwood and Stretton – which is a million-dollar suburb. And they don’t even have good public transport in Stretton.”
But while Mr Fruzande said the suburb was an untapped gold mine for those looking to take their first steps on the property ladder or start an investment portfolio, he warned Woodridge wasn’t immune from the Brisbane property boom, with prices already rising.
Harcourts Connections Stafford sales representative Robbie Lofaro said first-home buyers were flocking in droves to Marsden, where the repayments on a mortgage were significantly less than paying rent, sparking a demographic shift in the suburb.
“It’s not going to be a fast transition but the sale of [the] housing commission homes is slowly happening,” Mr Lofaro said.
“And we’re also seeing more investors sell because I think prices have started to increase … and that’s providing opportunities for first-home buyers. They can buy a townhouse here for $260,000 and eventually rent it out for $320 or $340 per week.
“So while you’re dream home isn’t a townhouse in Marsden you can live there a year and then rent it out and start your property portfolio.”
It was that dream that inspired the then-22-year-old first-home buyer Selene Bruynzeels to snap up a three-bedroom townhouse in Marsden for $240,000 from Mr Lofaro in September last year. It costs her just $237 per week in repayments before the body corporate fees.
“I was looking in several areas such as in and around Logan purely because it was more affordable,” Ms Bruynzeels said.
“The bank wouldn’t let me borrow as much as I dreamed ($500,000) and they told me I’d only get $290,0000 as a first-home buyer on the scheme and it was a slap in the face … but then I purchased a townhouse that was only 10 years old.
“I plan to live in it for a year and then rent it out for about $330-$340 per week.”
Brisbane City Mortgage Choice managing director Matt Cunliffe said first-home buyers and upgraders were now flooding the market, having realised rent prices were higher than a mortgage in some parts.
“I think any time is a great time to buy if you’ve got the capacity to do, but at the moment it would seem in comparison to rental prices the story is the most compelling it’s been in a long time,” Mr Cunliffe said.
“We’re now seeing more upgraders and they are saying that they are going to miss the boat [if they don’t buy soon] because they’ll be priced out,” Mr Cunliffe said.
But while FOMO alone could drive up those property prices, he said it was a prime time for buyers to dive into the market thanks to the wealth of opportunities that still abounded.
“If you’re looking at a loan of about $400,000 … the rent will often be around $1700 a month while the mortgage would be sub-$1500 for the same property,” he said.