Geelong suburbs where buying is better than renting revealed

More Geelong suburbs are within reach of renters trying to break into the housing market after this week’s interest rate cut, new analysis shows.

Research from Finder reveals it’s already better to buy a unit than lease one in Geelong West and Whittington.

The Reserve Bank’s decision to cut rates by another 25 basis points further opens the door to other suburbs by shrinking the gap between more expensive weekly mortgage repayments and rents to less than $50 a week for units in Norlane, Bell Post Hill, Lara, Herne Hill and Manifold Heights.

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This two-bedroom unit at 2/17 Collins St, Geelong West, is on the market for $500,000-$550,000.

Mortgage repayments don’t cost much more than rent in Herne Hill, where 2/136 McCurdys Rd will set you back $849,000-$899,000.

There’s a further glimmer of hope in the house market, with renters needing to find less than $100 extra a week to buy in Norlane and Breakwater.

The research assumes homeowners purchase at the current suburb median price, with a 20 per cent deposit, a 5.81 per cent interest rate and a 30-year loan term.

When the rate cut is passed on, paying off the mortgage on a unit would be $30 a week cheaper than renting in Geelong West and $17 cheaper in Whittington.

This would increase to a saving of $41 and $28 a week respectively, if the RBA cut rates again.

Geelong Real Estate Co director Ricky Forte said Geelong West units remained one of the few affordable footholds into the market.

This two-bedroom unit at 20 Anglesea Tce, Geelong West, recently sold for $610,000.

Affordability is a big drawcard in Whittington, where this bargain at 6/220-222 Wilsons Rd is listed for $270,000-$290,000.

“With median prices around $500,000, it’s a way to break free of rising rents without sacrificing location,” Mr Forte said.

“You can buy a neat two-bed unit here for the same weekly cost as renting and you’re walking distance to everything.”

He said crunching the numbers around paying off a mortgage versus rent had become a serious part of decision-making for homebuyers.

But Doolan Finance mortgage broker Sarah Daly said it wasn’t the only consideration, as renters had to factor in security and future returns.

“Even though rent is expensive with the way rates are, it is still more affordable, in most cases, to rent. But what does that look like long term?,” Ms Daly said.

“Just because it’s more affordable to rent you’re not taking into account your future growth of assets so I think it’s got to be looked at as to whether you can versus whether you should.”

Hayeswinckle, East Geelong agent Tiffany Simpson (right) is seeing more optimism among first-home buyers like Zoe Trezise, who bought her first property several years ago.

She said confidence was returning to the Geelong market, with inquiries increasing on the back of the first rate cut.

Hayeswinckle, East Geelong agent Tiffany Simpson said it was prime time for first-home buyers, who felt more confident to use their full borrowing capacity than they did 12 months ago.

“It is an opportune time because I don’t think there’s going to be any incremental increases, if anything there will be slow cuts,” she said.

“It is trending in the right way, and it may not be significant right now, however if you’re able to secure something now going forward it should become more affordable.

“If you wait too long then you will miss out because the competition will only increase.”

RENTING VERSUS BUYING IN GEELONG

Source: Finder. Assumes homeowners purchase at the current suburb median price, with a 20 per cent deposit, a 5.81 per cent interest rate and a 30-year loan term.

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