Help us improve our website by completing a quick survey. Start survey now

Upgrade your browser for the best CommBank website experiences. Click here.

Close

Commonwealth Bank reveals top suburbs where it's cheaper to buy than rent.

Sydney, 4 March 2009: Commonwealth Bank reveals the top suburbs across the nation where it is more affordable to buy a property than rent, helping buyers make informed decisions about the real estate market.

The Bank’s ‘Where it is cheaper to buy than rent?’ report prepared by RP Data Information Services reveals the 74 suburbs around Australia where on average it is more affordable to buy than rent.

Most affordable metro and regional suburbs – buy versus rent

Suburb

Type

State

Capital City/region

Value

Principal

Monthly repayment

Monthly rent

Difference

Hackett

U

ACT

Canberra

$244,609

$207,917

$1,212

$1,480

-$267.97

Rosehill

U

NSW

Sydney

$205,009

$174,257

$1,016

$1,520

-$504.19

North Dubbo

H

NSW

Regional- Dubbo

$114,179

$97,052

$566

$920

-$354.25

Ludmilla

H

NT

Darwin

$446,705

$379,699

$2,213

$2,600

-$386.59

The Gap

U

NT

Regional – Alice

$181,810

$154,539

$901

$1,060

-$159.14

Beachmere

U

QLD

Brisbane

$124,970

$106,225

$619

$990

-$370.78

Dysart

H

QLD

Regional –Broadsound

$400,879

$340,747

$1,986

$2,600

-$613.66

Gilles Plains

U

SA

Port Adelaide Enfield

$211,715

$179,958

$1,049

$1,280

-$230.96

Whyalla Playford

U

SA

Regional –Whyalla

$151,429

$128,715

$750

$880

-$129.67

Melton West

U

VIC

Melbourne

$195,675

$166,323

$970

$1,000

-$30.44

Yallourn North

H

VIC

Regional – Latrobe

$115,943

$98,551

$574

$680

-$105.51

East Perth

U

WA

Perth

$240,694

$204,590

$1,193

$1,200

-$7.37

Baynton

H

WA

Regional – Roebourne

$831,997

$707,197

$4,123

$8,000

-$3,877.48

 

“For many, the gap between paying rent and servicing a home loan is narrowing. This is a unique market with its own opportunities and risks for home

buyers, and while interest rates are now low, it’s important to take a long-term view.

“Potential buyers need to consider their individual circumstances and do their research to assess just how much they can afford to borrow, bearing in mind that their circumstances or the market can and will change over the life of a home loan,” he said.

RP Data National Research Director Tim Lawless, said, “During 2008 Australia experienced some fundamental shifts in its property market where we saw falls in property values, interest rates dropped to a 45 year low, and weekly rents increased dramatically.

“Now many renters are doing their sums to work out whether paying off a mortgage is going to be cheaper than paying a landlord.

“Our analysis identified 74 suburbs across the nation, where on average it is now more affordable to buy a home rather than rent. The majority of suburbs are in regional locations, often where housing demand driven by the resources sector has pushed rents very high.  However, there are 34 suburbs within the nation’s capital city metro areas (including South East Queensland’s Gold Coast and Sunshine Coast) that also fit the criteria of being more affordable to buy than rent,” he said.

The real estate market has seen significant changes over the last year with property values falling (2.6 per cent during the 2008 calendar year), interest rates have dropped to a 45 year low and rents have dramatically increased (11.2 per cent over the 2008 calendar year). 

According to Ross McEwan, Head of the Commonwealth Bank’s Retail Bank, while these conditions have contributed to greater opportunities for many potential homebuyers, purchasing a property should always be considered a long term investment.

The locations of the suburbs are relatively evenly split between regional and metro areas. Regional areas comprise of 54 per cent (41 suburbs) and metro areas 46 per cent (34 suburbs). Within the metro areas, almost without exception, it is units rather than houses which are the most affordable for purchase. The opposite is true for regional areas where detached houses are the most common.

Number of suburbs where it is cheaper to buy than rent

ACT

4

Canberra

4

NSW

29

Sydney

18

Regional

11

NT

3

Darwin

1

Regional

2

QLD

16

Brisbane

2

Gold Coast

2

Sunshine Coast

3

Regional

9

SA

6

Adelaide

1

Regional

5

Vic

6

Melbourne

2

Regional

4

WA

10

Perth

1

Regional

9

Total

74

 

The majority of suburbs are found in New South Wales, accounting for 29 of the 74 total suburbs. 18 of the New South Wales suburbs are within the Sydney metro area. Queensland has the second highest number with the majority located outside of South East Queensland’s metro area

To find out more about the Commonwealth Bank Home Loans visit: www.commbank.com.au/personal/home-loans 

Note to editors

A full copy of the report, including full regional findings, is available to media. Maps and graphs are also available on request. Contact Commonwealth Bank PR team.

 Methodology

The report’s analysis uses a number of assumptions to determine whether housing stock within a particular suburb is cheaper to buy than to rent, assuming a:

  • loan to value ratio (LVR) of 85 per cent, meaning 85 per cent of the properties value is available to be financed. In other words, purchasers will need a 15 percent deposit;
  • variable interest rate of 5.74 per cent which is the current variable rate being offered by the Commonwealth Bank at the time of writing (note that interest rates may vary from bank to bank);
  • loan term of 30 years.

Note that the analysis does not include expenses such as rates, utilities, insurances or costs of purchase eg stamp duty and legal fees. 

 

For more information or a copy of the report contact:

Sarah Gibbons

Commonwealth Bank

Ph: (02) 9378 5096

Mobile: 0403 681 515