It is almost impossible to find a Hobart suburb where buying a home is cheaper than renting.

New analysis of houses and units across Tasmania by Finder shows where renters could make the move to ownership and have more bang in their budget — but it won’t be in the south of the state.

Gagebrook was the only southern suburb where it is cheaper to buy a home.

And even with one or two cash rate cuts from the Reserve Bank of Australia, not one extra suburb will become cheaper.

There is more opportunity in the north and northeast, with five areas in the Launceston and North East region either cheaper now or will become so after a 0.25 per cent or 0.5 per cent cut is passed on by lenders. Results were similar on the West Coast.

Unit prices in Launceston’s Newnham are almost identical, with typical rent costing $390 per week and a loan $392. Finder’s modelling showed the mortgage payment would decrease to $382 following a 0.25 per cent rate cut, or $371 with a 0.5 per cent cut.

Houses in Burnie suburb Acton currently have a $1 difference between weekly rent and mortgage, but if a lender passed on a quarter-size or half-size rate cut it would put $10 to $20 per week back into the family coffers.

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Finder personal finance specialist Taylor Blackburn said ‘To own or not to own’ is an age-old question, but the answer is usually not that buying is cheaper than renting.

He said there are a handful of suburbs where a monthly mortgage might be less than the average rent, but people should keep in mind this doesn’t include a 20 per cent deposit, stamp duty and all the other fees that go into buying the house in the first place.

“This research shows the importance of getting your home loan rate lowered,” he said.

“Very few renters are successfully arguing for rent decreases, but homeowners can do this with a rate cut, a phone call, and by refinancing.”

Meanwhile, REA Group March quarter rental figures show Hobart house rents increased by 6 per cent year-on-year to a $585 median price. Units were also up by 4.3 per cent annually to $490.

In the rest of Tasmania, house rents increased by 2.2 per cent and units by 3.9 per cent, now costing $460 (houses) and $400 (units).

Harcourts Hobart property representative, Mark Weaver, said there were pros and cons for renting and buying.

Buying allows people to invest in a long-term asset of their own, he said, while renting can offer flexibility and no tax or maintenance bills.

“Fiscally, while the weekly outgoings associated with ownership will most likely exceed the cost of renting, the homeowner will benefit from the capital growth associated with the housing market,” Mr Weaver said.

“This will enable them to build equity and grow their asset wealth over time.”

Mr Blackburn said most homeowners jump for joy at a 25-point rate cut, but they should also do their research on the best options available.

“The delta between the average market rate and the lowest is about 40 basis points,” he said.

“You might be able to give yourself nearly two rate cuts by taking the bull by the horns and switching.”

For first-time buyers, Mr Weaver said a unit would be more affordable than a house, and could help them get a foot on the property ladder.

However, there are things to watch out for, he said.

“Unit price growth in Hobart is often slower than houses. The equity build may be slower,” he said.

“There can be hefty body corporate fees, and insurance to consider.

“As Hobart’s population ages, our demand for higher density, more affordable housing increases.

“Well-built and well-located units are a dependable investment for those wishing to enter the market this way.”

Finder’s analysis of PropTrack median price data is subject to 15 minimum sales per suburb in the last 12 months.

HOMEOWNER HANNAH IS MAKING MOVES

The keys to Hannah Biedka’s new home are just days away from being collected.

Next week, Ms Biedka, 38, will leave her rental behind, and move with her son to a new home on Hobart’s Eastern Shore.

Ms Biedka said there are clear advantages to owning a home rather than renting.

She said it feels “rewarding to have your own home”.

“There is a lot of freedom in it; you’re not answering to a landlord, so you have the opportunity to showcase your creative side however you wish,” she said.

“I love making home improvements, so it’s nice to know I could go and buy a pot of paint tomorrow and change the style of a room. Even small things like being able to hammer a nail into a wall without seeking approval.

“It’s nice to know that every improvement made is an investment in my future and that I am building equity in something that is mine.”

Like every mortgage holder and budding homebuyer, Ms Biedka has been keeping an eye on the Reserve Bank of Australia and its interest rate announcements.

She said it was a factor in her decision to become a homeowner again.

“A change in interest rate can mean the difference of hundreds of dollars,” she said.

“You have to consider that it could go up again, and ensure you allow a buffer to account for that possibility.”

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Ms Biedka said finding the right home for her family did not come with too many hurdles.

“I allowed myself plenty of time to find a house before my lease expired,” she said.

“This meant I could view a number of houses before settling on the one I wanted, knowing I didn’t have any stress due to time considerations.

“I made sure I felt 100 per cent certain in my decision before making an offer.”

The post Revealed: Tasmanian suburbs where it’s cheaper to buy than rent appeared first on realestate.com.au.

Sweeping interest rate changes this week have made buying a home cheaper than renting one in a growing cohort of suburbs – with experts warning renters with the means to buy should act quickly.

New analysis has revealed repayments on an average unit have become cheaper than market rent in 26 Sydney suburbs, leaving new buyers over $100 a week better off than renters in some areas.

It’s an increase from the 18 suburbs where this situation existed prior to the Reserve Bank’s Tuesday announcement of another 0.25 per cent interest rate cut.

These suburbs included areas near Parramatta and the airport, plus parts of the southwest, according to the Finder.com.au comparison of median rents, home prices and loan costs.

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Finder.com.au finance analyst Taylor Blackburn said the study showed how much of a difference the latest rate cuts were having on homeowner finances.

“To own or not to own is an age-old question, but the answer is usually not that buying is cheaper than renting,” he said.

“There are a handful of suburbs where your monthly repayments might be less than the average rent … very few renters are successfully arguing for rent decreases but homeowners can do this with a rate cut.”

SEARCH FOR YOUR SUBURB HERE TO SEE IF IT’S CHEAPER TO OWN OR RENT

The analysis assumed the buyers bought at the median unit price in their area, used a 20 per cent deposit and paid an average loan rate. Repayments were then compared to median rents.

Additional costs of homeownership such as stamp duty, strata fees and council rates were not included in the analysis.

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One of the suburbs where new buyers got the biggest savings by exiting the rental market was Haymarket, south of the CBD.

Median rent was an average of $123 per week costlier than repayments on units priced at the suburb median following this week’s cut, Finder noted.

Unit buyers in Winston Hills, near Parramatta, would get similar savings of about $121 per week.

Other suburbs where unit repayments were cheaper than rent included Parramatta region suburbs Granville, Harris Park, Merrylands, Guildford and Merrylands West. It was also cheaper to be a homeowner in Mascot and, in the southwest, in Wiley Park and Lakemba.

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And there could be even bigger savings for homeowners later this year if the Reserve Bank announces another cut – the expectation of most economists and major banks.

Another 0.25 per cent rate cut, if passed in full by lenders, would make repaying a loan on a home at current prices cheaper than renting in a total of 35 Sydney suburbs.

Suburbs set to favour homeowners after another cut included Liverpool, Zetland, Parramatta CBD and nearby suburbs Westmead and Wentworthville, among others.

There would be an additional 50 suburbs in regional NSW where renters with deposits would be better off taking the plunge into homeownership.

Aussie Home Loans broker Kim Horan, who handles loan applications primarily across Western Sydney, said renters were beginning to pick up on the savings they could get by purchasing.

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“Increases in rent have made a lot more renters realise they need to buy,” she said.

“Certainly in Western Sydney it’s often the case that units will be cheaper to own because the prices are a bit lower but the rents have really gone up in the last five years.”

Renters Luke and Bobbie Carroll said knowing that renting may cost more than owning was a strong motivator to exit the tenant pool.

“We really want to buy this year,” Ms Carroll said. “We are paying about $100 more a week in rent than we used to and we keep hearing horror stories from friends about their rent increases.

“Knowing it would be cheaper to pay off a loan, and we’d get some of the equity, it’s made us realise we really shouldn’t be renting for much longer.”

Housing experts said home buyers who acted quickly would reap the biggest benefits as interest rate cuts are also expected to push up prices later this year.

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Canstar data insights director Sally Tindall said the key challenge for buyers would be to get into the market, which rate cuts would not make any easier.

“It’s unlikely to help them get a foot on the property ladder faster,” she said, adding that buyers getting increased borrowing capacity could push up prices.

“When buyers see their maximum borrowing budgets rise at the same time … the biggest winner in the equation is often the person selling the property.”

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Interest rate cuts are boosting the number of Melbourne suburbs where it’s cheaper to pay a mortgage than rent — with buyers saving more than $150 a week in some areas.

Finder analysis shows the number of suburbs where the mortgage on a median unit undercuts the average rent has risen from 25 to 32.

In Notting Hill, Travancore and Docklands, weekly savings for buyers now range from $110 to $156.

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Across Victoria there are 13 additional suburbs where buying a unit is cheaper than renting, including Mildura, Geelong West, Moe, Sale and Benalla.

Another 18 areas, typically more remote in location, have cheaper house prices than rents, from Rochester near Shepparton to Ouyen south of Mildura and Mortlake towards Warnambool.

The Melbourne list is expected to rise to 44 after another cut, potentially as soon as July, and could reach 57 before the year’s end if the Reserve Bank delivers a third.

But with warnings cheaper money could fuel further price growth, renters hoping to escape the squeeze may not have long to act.

Finder personal finance specialist Taylor Blackburn said the rent-versus-buy equation was tipping in more buyers’ favour every month.

“There are a handful of suburbs where your monthly mortgage might be less than the average rent,” Mr Blackburn said.

“This research shows the importance of getting your home loan rate lowered.

“Very few renters are successfully arguing for rent decreases, but homeowners can do this with a rate cut, a phone call or a refinance.”

He added that some borrowers could unlock the equivalent of nearly two rate cuts by switching to a better loan.

RT Edgar Inner North auctioneer Jerome Feery said Melbourne’s inner suburbs were already seeing a lift in first-home buyer interest.

“There’s a real shortage of rental stock right now, and it’s pushing tenants to ask: ‘Why am I paying someone else’s mortgage?’” Mr Feery said.

“We’re seeing a big wave of first-home buyers snapping up investor stock and taking that leap into ownership.”

Mr Feery said this week’s rate cut hadn’t caused a market surge, but sentiment was clearly improving.

“A couple of months ago, we were lucky to see one bidder at auction,” he said.

“Now we’re seeing two or three active buyers on entry-level homes.

“It’s not a boom — but it’s a bounce.”

The auctioneer warned buyers not to wait too long if they were ready to act.

“Get organised; have your pre-approval, your building inspector, and know your numbers,” Mr Feery said.

“When a good property comes up, being prepared can make all the difference.”

Melbourne buyers’ advocate Simon Murphy said affordability had now shifted, especially for renters comparing repayments to rent.

“What I’m seeing is that rent is just as expensive, or in some places, even more expensive than mortgage repayments,” Mr Murphy said.

“That’s pushing a lot of renters to finally ask: is it time to jump in?”

But Mr Murphy said the federal government’s First Home Guarantee 5 per cent deposit scheme wasn’t keeping pace with the market, especially in Melbourne.

Latest PropTrack data shows the city’s median house value is $900,000, well above the $800,000 cap on the program.

“The same with stamp duty, the exemption at $600,000 is increasingly irrelevant,” he said.

The Melbourne buyers’ advocate added that the 0.25 percentage point rate cut could increase a single buyer’s borrowing power by around $25,000.

“For those with savings in the bank, it’s game on,” Mr Murphy said.

“But buyers using the scheme are still boxed in and many are turning to alternative strategies to enter the market.

“Some are moving further out for a year or two, or they’re rentvesting — buying in a more affordable area while continuing to rent closer in.”

He cautioned that rising demand could quickly drive prices higher.

“There’s energy in the market again, you can feel it,” he said.

“Those who wait may be priced out all over again.”

Top 10 Victorian Suburbs Where It’s Cheaper to Own Than Rent After One Rate Cut

Source: Finder and PropTrack – Full list here

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Explosive rent rises paired with the latest interest rate cut have made it up to $804 a month cheaper to own a property than rent in some parts of southeast Queensland.

But buyers will have to settle for a unit over a house in Brisbane or prepare to move to regional Queensland for the savings.

Finder analysis of PropTrack data of the past 12 months, released today, revealed the Sunshine State had the highest number of suburbs in the country where it was cheaper to own than rent, with 73 suburbs for houses (9%) and 89 suburbs (20%) for units.

INTERACTIVE- SEARCH YOUR SUBURB

Nineteen suburbs were added to the list after Tuesday’s rate cut with one in five units now cheaper to own than rent in Queensland.

In southeast Queensland, units owners in the Ipswich suburb of Brassall had the biggest saving of $201 a week — the typical unit price was $155,608 with a weekly mortgage repayment of $169, while the weekly rent was $370.

In the capital, unit owners in South Brisbane were paying a weekly mortgage repayment of $704 if paying with a 20 per cent deposit. Rents were $770 a week.

Bowen Hills, Fortitude Valley and Spring Hill also provided units that were typically cheaper to pay off than rent.

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20401/33 Manning Street, South Brisbane is on the market at offers over $635,000.

Place Kangaroo Point agent Michael Hatzifotis, who markets properties in Brisbane’s CBD, said half of his potential buyers were now tenants trying to get into their own units.

“What we are seeing currently is tenants in the immediate areas of South Brisbane and West End move out of the rental market because of rising rents,” Mr Hatzifotis said.

“It has become a lot cheaper to own — in some instances they are in front up to $1000 a month and they are paying off their own property.”

The only suburb in southeast Queensland where it was slightly cheaper to own a house was Russell Island, where a homeowner could save $6 a week based on a median house price of $400,000, weekly rent of $440 and mortgage repayment of $434.

The biggest savings were in Biloela in regional Queensland where the median house price was $350,000 with a $380 weekly mortgage repayment.

The average rent was $650 a week, offering homeowners a $270 difference in owning and renting.

Moranbah, west of Mackay, had a median unit price of$350,000 with a $380 weekly mortgage repayment and a weekly rental payment of $700.

It provided homeowners a $320 difference in owning and renting.

Other suburbs in north Queensland where it was cheaper to own a house than rent included Airlie Beach, Cairns North, and Townsville’s Belgian Gardens.

On the Gold Coast, only Coombabah and Helensvale units provided a cheaper alternative to renting.

Finder personal finance specialist Taylor Blackburn said there were many factors to weigh up when deciding whether to buy or rent.

“To own or not to own is an age-old question, but the answer is usually not that buying is cheaper than renting,” Mr Blackburn said.

“There are a handful of suburbs where your monthly mortgage might be less than the average rent, but keep in mind this isn’t including a 20 per cent deposit, stamp duty and all the other fees that go into buying the house in the first place.”

Mr Blackburn said the research showed the importance of getting your home loan rate lowered.

“Very few renters are successfully arguing for rent decreases, but homeowners can do this with a rate cut, a phone call or a refinance,” he said.

“Most homeowners jump for joy at a 25-point cut, but the delta between the average market rate and the lowest is about 40 basis points.

“You might be able to give yourself nearly two rate cuts by taking the bull by the horns and switching.”

Real Estate Institute of Queensland CEO Antonia Mercorella said the rate was a welcome reprieve for homeowners and buyers.

“It provides breathing space for mortgage holders and encourages more Queenslanders to enter the property market,” Ms Mercorella said.

Finer data was based on a 30 year mortgage with 20 per cent deposit at the home loan rate of 5.81 per cent.

Median home values and rents were supplied by PropTrack.

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