Suburbs where it's cheaper to buy than rent
With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found.
In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent.
The research found there were 495 house markets and 597 unit markets where this was the case.
This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location. Many young people are looking to 'rentvest' in order to own their first home. NewsWire / Gaye Gerard Credit: NewsWire
'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said.
'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers.
'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle.
'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.'
A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000. Cotality head researcher Eliza Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. Credit: Supplied
The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo.
In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South.
Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt.
Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington. Australia's median rent price sits at $659 a week, an increase of 39 per cent over the last five years. NewsWire / Max Mason-Hubers Credit: News Corp Australia
A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found.
Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year.
'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Perth Now
10 minutes ago
- Perth Now
WFH could become legal right
Working from home for two days a week could become a legal right in Victoria, under new plans proposed by Premier Jacinta Allan. The state government is promising to introduce the law — covering both public and private sectors — by next year, with it applying to anyone who can 'reasonably' carry out their work away from the office. Ms Allan will tell the annual state Labor conference: 'Working from home works for families and it's good for the economy. 'Day after day, unions are being contacted by workers who have been denied reasonable requests to work from home, and across the country, Liberals are drawing up plans to abolish work-from-home and force workers back to the office and back to the past. 'That's why the Allan Labor government is acting. Enshrining work from home in law means this life-changing practice isn't something you or your loved ones have to politely ask for. It's a right you'll be entitled to.' Victorian Premier Jacinta Allan is set to announce the law on Saturday. NewsWire / Nadir Kinani Credit: News Corp Australia She will add that a consultation will take place on the proposed Australia-first law, but added it won't determine if the plans should go ahead. 'We're already clear on that: it should be. We just need the appropriate laws to reflect it,' she said. Ms Allan said the new policy is aimed directly at supporting families, promising average savings of $110 per week, or $5308 annually in commuting costs. 'Work from home supports women with children, carers and people with a disability to work,' Ms Allan said. 'Thanks to work from home, workforce participation is 4.4 per cent higher than before the pandemic.' The legislation is expected to be introduced later this year. The move follows significant debate about work from home policies during the federal election, with Peter Dutton forced to backtrack on a proposed policy to limit remote work for public servants due to public backlash.
7NEWS
40 minutes ago
- 7NEWS
Suzuki Australia 'ready' for new emissions regulations
Despite Suzuki's relatively slow rollout of electrified vehicles, the brand's local arm says it's prepared to deal with Australia's New Vehicle Efficiency Standard (NVES) as it readies additional mild-hybrids and its first electric vehicle (EV). Suzuki, like every other manufacturer operating in Australia, is now obliged to meet set average carbon emissions targets across its fleet each year, or be penalised $100 per g/km of CO2 for every vehicle that exceeds the target. The brand's entire Australian fleet falls into the Type 1 passenger car category, which means each car is subject to a CO2 limit of 141g/km for 2025. This limit will drop to 117g/km in 2026, 92g/km in 2027, and eventually 58g/km in 2029. Though Suzuki's Australian lineup currently features only two mild-hybrids and no EVs, general manager Michael Pachota maintains NVES is simply another regulatory hurdle for the brand to overcome. 'We've been here for a long time. We're not going anywhere,' he told CarExpert. CarExpert can save you thousands on a new car. Click here to get a great deal. 'NVES is just another thing that we have to adapt and evolve our product portfolio to meet. With that said, the Australian consumer will decide.' Suzuki's model range in Australia is currently undergoing a revamp after several vehicles fell victim to new safety regulations last year. With its up-to-date cars, Suzuki is, on average, in the clear for 2025 – the Swift Hybrid has maximum claimed emissions of 90g/km of CO2, while the Fronx Hybrid produces 113g/km. Only the Jimny exceeds the target with a minimum of 146g/km across its lineup. The defunct S-Cross, Vitara, and Swift Sport are all on the bubble of the current 141g/km target, while the Ignis is on par with the Fronx Hybrid. Only limited dealer stock of these models remains. The emissions of these vehicles means Suzuki will likely exceed the average fleet-wide CO2 limit in three year's time, which means more efficient models will be required to offset the 'dirtier' ones. These efforts will be bolstered by the Vitara Hybrid – albeit with mild-hybrid or 'strong' hybrid powertrains as-yet unconfirmed – and electric eVitara in early 2026, while Suzuki could look overseas for additional hybrid models. In the UK, Suzuki sells the Across plug-in hybrid (PHEV) – a rebadged version of the outgoing Toyota RAV4 – that produces a claimed 26g/km of CO2. There's also the full-hybrid Swace – a rebadged Toyota Corolla Touring Sports wagon – with claimed emissions of 102g/km. This, in theory, could provide Australian customers with more choice in Suzuki models than ever, and Mr Pachota maintains buyer attitudes will shape the brand's direction beyond its initial plans. 'Our plan is quite good, I've gotta say. We're ready for it,' he told CarExpert. 'As the market changes or there's different conditions in the market with competitors and so forth, and if that actual measurement of NVES changes because it's constantly up in the air, or whatever it may be, we'll adapt and evolve, and we're very prepared to do so.' Mr Pachota's confident sentiment is in contrast with recent comments made by Suzuki Queensland – a separate entity in charge of the Sunshine State and New South Wales' Northern Rivers region – general manager Paul Dillon. In a separate CarExpert article published this week, Mr Dillon claimed NVES will boost Chinese brands, raise prices, punish makers of small cars, and end up forcing many buyers to shop for less efficient used cars. 'I would say, 'Would you consider a Suzuki to be a reasonably efficient car?',' Mr Dillon told CarExpert. 'And to consider that next year there will be penalties on cars like Fronx, for a 1.5-litre hybrid vehicle with [an integrated starter generator], there are still penalties on that car next year.' He continued by saying Suzuki Queensland would have to raise the prices of its vehicles if NVES fines begin to stack up – a fate he also expects to befall other non-Chinese carmakers – making cheaper Chinese cars look more appealing. 'The legislation's almost leaning towards [Chinese brands], isn't it?' Mr Dillon said. Asked whether the eVitara would be able to offset Suzuki's average CO2 emissions, Mr Dillon says he believes 'there will be a small market for EVs'. 'Unfortunately, I don't think the government fully considered that. I think there's issues with the NVES they haven't fully considered, unless they specifically are out to raise more tax from the consumers.'
7NEWS
40 minutes ago
- 7NEWS
Cupra "pushing really hard" for connected services in Australia
Cupra Australia says it's 'pushing really hard' with its Spanish global parent to bring factory-backed connected services Down Under, in direct response to customer feedback. Speaking with CarExpert, head of product for Cupra Australia – Jeff Shafer – said the lack of connected services in the brand's vehicles locally is something his team is directly looking to address soon. 'Yeah, we're definitely looking to go with a factory-backed solution – it's a really hot topic,' Mr Shafer said. 'We feed back a lot of the local market needs [to global] and what we hear from customers. It's an issue that exists at a Group level, not just a Cupra level, but we're pushing really hard. I don't have timing I can share right now, but things are moving in a positive direction.' CarExpert can save you thousands on a new car. Click here to get a great deal. The Volkswagen Group in Australia has been unable to implement a factory-backed connected services feature set, something that has also impacted the specification of its products – particularly, its range of electric vehicles (EVs) based on the dedicated MEB architecture. While online navigation and live traffic updates are potentially features that most Australian buyers could live without, the lack of proper app functionality like most EV rivals – including to check charge status and toggle remote features like cabin pre-conditioning and the like – stands out in a market where this is becoming increasingly common. Moreso, the MEB platform requires a connected services module for certain features which are currently left out of Australian models, like inbuilt satellite navigation and emergency call functions, which also tie to functionality in other available features like head-up displays, as well as over-the-air software updates. In the case of the Cupra Born, it also missed out on the Group's clever Travel Assist semi-autonomous highway mode as a result too, as it offers connected functionality. Earlier this year, Volkswagen Australia's passenger and commercial divisions rolled out a third-party solution in lieu of proprietary services, in the form of Goconnect. Via the Goconnect phone app, owners can view their parking position, visualise the vehicle's most recent trips, interact and book appointments with their dealer, view important errors and warnings, see the high-voltage battery status, and see the driving speed. At the launch of the ID. Buzz electric van range, Volkswagen Group Australia director of commercial vehicles, Ryan Davies, said: 'Australia is currently one of those [markets] we don't have a true picture of when the connectivity that's available in Europe will make its way into Australia'. Audi Australia, while also under the VW Group banner locally, has long offered its own connected solutions via the Audi connect plus feature which offers a range of online features and remote functions. However, the MEB-based Q4 e-tron misses out on these features, at least initially, due to the embedded connected module in the platform. While premium brands and Tesla have had forms of connected services and app functionality for some time, mainstream manufacturers have made strides in this space of late, as have many new Chinese challenger brands. Ford, Hyundai, Kia, Mazda and Toyota all offer connected services and app-based remote functions, as do the likes of BYD and MG. All offer complimentary subscriptions with purchase, though length and available functionality can vary depending on the brand and subscription type. Not all of a brand's models are always compatible, either.
