Cheaper to buy than rent as housing affordability back to 2016 prices: CoreLogic/ANZ report

Cheaper to buy than rent as housing affordability back to 2016 prices: CoreLogic/ANZ report
Cheaper to buy than rent as housing affordability back to 2016 prices: CoreLogic/ANZ report

Housing affordability is now at its best levels since 2016, the inaugural Housing Affordability Report from CoreLogic and ANZ has found.

The report, produced with figures from the December 2018 quarter, has noted housing affordability over the last two years has been improving much faster than it had declined over the past decade.

Sydney is described as being "overwhelmingly" the least affordable market to buy in, the report notes, followed by Melbourne. Darwin is the most affordable capital city.

Regional New South Wales is also the least affordable regional market across the country due to the strong value growth over recent years.

For the first time, Hobart is the least affordable capital city to rent.

To enlarge, click here.

Cheaper to buy than rent as housing affordability back to 2016 prices: CoreLogic/ANZ report 

CoreLogic's head of research for Australia Cameron Kusher says the end of the housing downturn has had to be adjusted.

“The recent drop in property values follows a long period where prices increased at a much faster pace than household incomes," Kusher noted.

“We predict that price falls will settle later this year, followed by modest price growth starting from 2020,” Mr Kusher said.  

Kate Gibson, ANZ's home owners lead, says some areas it is more affordable to buy than rent. 

“Buying a home is an aspiration for many Australians and for the first time, we’re seeing suburbs and towns in every state where it is more affordable to buy than rent.

“This shift, combined with record low interest rates, is driving more first home buyers to look at entering the market.

"For the first time in fifteen years most buyers are not chasing a rising market,” Gibson said.

Albury in regional New South Wales is one of the areas where it is more affordable to buy than rent.

Some 26.8% of household income goes on a rental home, however to service the repayment of an 80% LVR mortgage is only 25.4% of household income.

Broken Hill and the Far West area has one of the biggest gaps between rental and mortgage repayments.

Some 25.9% of a household income goes on a standard rental, whereas only 9.2% of household income would go on servicing a mortgage.

In regional Victoria, Glenelg and the South Grampians cost 24.3% of household income to afford to rent, as opposed to the 19.4% repayments on a mortgage.

It is cheaper in Gippsland East, Latrobe Valley, Loddon, Maryborough, Mildura, Moira, Murray River, Shepparton and Wellington to repay a mortgage than to rent.

There are no areas in Sydney and Melbourne's CBD ring that it is cheaper to pay off a mortgage than rent, however there are a number in Brisbane.

Beenleigh, Caboolture Hinterland, Ipswich Hinterland and the Springwood Kingston region are all more affordable to have a mortgage than rent.

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

Tags: 
Housing Affordability Corelogic

Comments

Be the first one to comment on this article
What would you like to say about this project?