By Mina Martin
More than a third of Australian homes are still cheaper to buy than rent at current prices, which means there are still opportunities for buyers across the housing market, according to PropTrack’s national analysis of estimated purchase and rent prices.
PropTrack Market Insight Report suggested that favourable buying conditions persist, despite a record pace of interest rate hikes and a 36% surge in home prices since the onset of the COVID-19 pandemic.
“A record pace of rent growth – with advertised rents up 14.6% over the past year – has offset higher buying costs in many regions,” said Paul Ryan (pictured above), PropTrack economist and report author.
Buying conditions are most favourable in Queensland, South Australia, and Western Australia. In WA, in particular, buying is cheaper than renting for three out of every four homes. However, the report also suggested that ongoing strong price growth conditions in these states, a trend observed since the pandemic’s onset, may reduce the percentage of homes that are cheaper to buy.
Buying conditions for units remained more favourable than houses, with 55% estimated to be cheaper to buy than rent. In contrast, just 29% of houses across the country are deemed more cost-effective to purchase.
PropTrack additionally noted that many capital cities showcasing favourable buying conditions are a result of recent unit developments. In these cases, prices remained relatively low in comparison to rents, particularly following a period of record rent growth.
“Looking to 2024, higher interest rates will challenge housing affordability for many. This may
slow price growth and rebalance buying conditions across the market,” Ryan said.
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