According to ANZ and CoreLogic’s new housing affordability report, which examined the cost of housing as a proportion of average income, there is an increasing number of locations across the nation where it is cheaper to buy than rent. The proportion of income needed to pay the rent is approximately equivalent to the proportion of income required to serve a mortgage in Australia, according to the report.
On average, tenants contribute 30.3 percent of their income to the price of housing, which is only slightly lower than the 30.6 percent of mortgage payers. ANZ and CoreLogic reported that rental costs have risen since the end of 2016, representing an 8.6% increase in rents between the end of 2016 and June 2019, while household incomes have risen by 5.3%.
CoreLogic’s Head of Research, Tim Lawless said: “We see more urgency coming back into the market, especially in Melbourne and Sydney where housing values have risen 6 percent and 5.3 percent since May. If this trend continues, we could see property prices reach new highs early next year.
To prospective buyers and renters though, there are still some good news. The research shows that households have now committed the smallest proportion of their income to paying a new mortgage loan for investment property since early 2004, and since 2007 tenants have spent the lowest proportion of their income on housing.
ANZ and CoreLogic have listed almost 80 regions across Australia as areas where purchasing is cheaper than renting. Some of the locations include Molonglo, Ipswich, Broken Hill, Snowy Mountains, Dubbo, Kwinana, Armidale, Brighton (Tas) and Darwin city and suburbs.