John McGrath urges buying over renting given its an "exceptional time" to buy
Today’s market presents an exceptional time to buy, with three year fixed rates now under 5% and various experts predicting further falls in the variable rate, estate agent John McGrath says.
"No matter where you are in Australia, you can benefit from today’s market conditions in the switch from renting to home ownership," he told his Switzer blog readers.
He noted the recent release of a list where it is cheaper to buy than rent has increased substantially over the past six months – in fact, it’s more than tripled from 179 in December 2012 to 692 in July this year, according to RP Data’s latest Buy vs Rent report.
He added it gets cheaper if you fix your ‘P & I’ loan for three years at 5.15%.
"On these metrics, there are 864 suburbs where it is cheaper to buy – up from 193 six months ago.
"Guess what happens on an interest-only fixed loan – 3,230 suburbs become cheaper to buy in, up from 1,153."
Among capital cities and major regional centres, Sydney offers the largest number of cheaper-to-buy suburbs at 73, followed by Brisbane at 71 and the NSW Hunter Valley at 40 suburbs. This is based on a principal and interest (P & I) loan on a variable rate of 5.4 per cent.
It’s becoming cheaper to buy in many areas for three reasons – rising rents; falling official interest rates; and strong competition among the banks that has seen them drop rates – especially fixed rates, independently of any official movement by the Reserve Bank.
"Young Australians really need to consider this carefully," he suggested.
He lists the top 5 suburbs in every capital city (plus the Gold Coast) where it is cheaper to buy than rent, based on a 5.4% P & I variable loan: 
