Tired of rental inspections or battling hordes of people to get a one bedroom unit in Mt Lawley?
Well, your days in the tenant rush might be over, with new data from the Real Estate Institute of WA revealing that there are currently over 100 suburbs in Perth where it is now cheaper to buy a home than it is. ‘rent one.
And not just a little cheaper – buying is up to 40% cheaper in some locations in P-town.
REIWA President Damian Collins told The West Live he “never saw the rent / buy equation come so strongly in favor of buying.”
The Advanced Body of Realtors compared the median weekly rental cost in the suburbs of the metro area with the weekly costs of paying a mortgage based on the median selling prices in those suburbs.
The calculations assumed that homebuyers would have a 20 percent deposit and get a 2 percent interest rate from their financial institution, on a 30-year loan.
It also factored in an additional percent of the median sale price to account for costs of ownership that tenants don’t have to worry about, such as property maintenance and council rates.
The caveat here, of course, isn’t that all potential buyers will have saved up a 20 percent deposit, and many won’t get such a great mortgage rate from the bank either.
Then there are the stamp costs associated with buying a property and the possibility of an increase in interest rates in the future, which will change the calculations.
However, Mr Collins said the recent increase in median rental prices and historically low interest rates still made many Perth suburbs a very attractive proposition for buyers.
He cited Brentwood in the town of Melville as a prime example.
The suburb was at the top of REIWA’s list of places to buy was cheaper than renting, with the median rental price in the southern river suburb hitting $ 950 per week, while buying a property would cost around $ 573. $ per week.
“Once buyers save a down payment, the decision to buy a property is more financially advantageous than renting in these suburbs,” Collins said.