Where Buying Units Beats Renting

Rising rents mean there are still some capital city markets where weekly mortgage repayments are lower or the same as weekly rents.

Cotality data shows that the average monthly mortgage repayment for units in some capital cities, such as Melbourne, Darwin, and Canberra, is lower than the median rent.

Head of Research Gerard Burg says rents have risen rapidly in recent years and that growth is picking up again, which is making buying a better option in some locations.

“Some apartment markets have seen additional supply come online, which has helped keep a lid on value growth even as rents continued to rise,” he says.

“When rents rise faster than property values, the cost gap between renting and buying naturally narrows.”

Inner Melbourne is one such market, where mortgage repayments based on the median unit price are about $322 a month lower than renting.

In Palmerston in the Northern Territory the difference is $265 per month, while Darwin is $188 cheaper and Woden Valley in the ACT is $25 cheaper.

Burg says while there are obviously other costs associated with buying, the financial downside to renting is that renters don’t get a return on their investment.