The Perth suburbs where units could be your way onto property ladder
But the catch is, you need a 20 per cent deposit to buy the apartments.
The research highlights how high lease costs are keeping a third of the population stuck in the rent trap, paying off a landlord's mortgage — instead of their own — while they struggle to save the required deposit.
President of the Real Estate Institute of WA Suzanne Brown acknowledged the odds are stacked against renters.
'It should always be your goal to exit the rental market — whatever that looks like,' she said.
'Perhaps that is buying something you can afford and renting somewhere you want to live. But buying should always be the long run focus.'
Ms Brown said renters should not give up, as she regularly saw examples of people who saved a 20 per cent deposit, sometimes in challenging circumstances.
Furthermore, major help was coming for first-home buyers through the First Home Guarantee, which will help eligible buyers to purchase with as little as a five per cent deposit without paying costly lender's mortgage insurance.
Research by the Real Estate Institute of WA shows 28 suburbs have median unit rents that are higher than weekly mortgage repayments at 6.05 per cent interest over 30 years.
Bayswater, Burswood, Beckenham, Perth and Cannington have the highest rental income versus mortgage cost differential.
In Burswood, there is almost a $1000 monthly difference between median mortgage repayments ($2737 per month) and median rental income ($3683 per month).
While the REIWA research does not include water, council rates and strata fees, separate research by The West Australian shows it is often still cheaper to buy than rent once these costs are included.
A two-bedroom city apartment on Murray St, for example, sold for $518,000 in mid May.
With a 20 per cent deposit, the owner pays $575 a week to repay the $414,000 loan over 30 years. Water and council rates, and the strata levy, comes to an additional $103 a weekly, leaving the home owner $678 a week out of pocket. An apartment in this city complex sold for $518,000 in mid May and advertised as a rental two weeks later for $725 a week, making it cheaper to buy than rent. The catch is, you have a deposit. Credit: supplied
But the very same apartment has this week been advertised as an unfurnished rental property, on a six-month lease, for $725 a week, leaving the home-owner positively geared from day one, nearly $50 a week in the red.
In another example, a two-bedroom, two-bathroom apartment in Bayswater sold for $540,000 in October.
Buyers would need a hefty $108,000 deposit to buy it, and repay $600 a week for 30 years under 6.05 per cent interest.
A further $35 a week is required for the strata fees, and $59 is required each week for council and water rates.
With total weekly costs at $694, the owner is still ahead, given an almost identical apartment around the corner is renting for $740 a week. This two by two Bayswater apartment sold for $540,000 in October 2024. Credit: supplied
Another examples includes a modern complex in Burswood, which is currently advertising a one-bedroom apartment, with parking space, for $650 a week rent.
However, the neighbouring one-bedroom apartment sold in mid May for $465,000. With a 20 per cent deposit ($93,000) a mortgage- holder would repay about $520 a week for 30 years. An extra $94 is required each week to pay water rates, council rates, strata levies and a special deck levy. With total costs at $614 a week, the owner is still ahead.
'Units are a more affordable entry point to the market than houses, particularly in areas closer to the city and lifestyle attractions, and can be good options for people looking to exit the rental market,' said Ms Brown. This one bedroom unit in this Burswood complex sold recently for $465k. Credit: supplied
'Currently capital growth for the broader unit market is on par with the housing market, driven by the strong demand for property.
'In general though, the rate of growth for apartments — in particular — does tend to be lower than for houses. But that is not often a significant factor for people looking to buy their first home.
'For investors, the unit market usually outperforms the housing market for yield. '
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