Revealed: Tasmanian suburbs where it’s cheaper to buy than rent

Gagebrook is the only suburb in the south where buying a home is cheaper than renting. Picture: Matt Thompson

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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No.21 Briar Cres is the only house for sale in Gagebrook today. Listed with LJ Hooker Pinnacle Property at “Offers over $399,000”. Picture: realestate.com.au

This unit at No.184B Alanvale Rd, Newnham is on the market at $445,000-plus with Sims for Property. Picture: realestate.com.au

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.”

Taylor Blackburn, personal finance specialist at Finder. Picture: Supplied

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.”

Harcourts Hobart property representative, Mark Weaver. Picture: Supplied

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.”

Homebuyer Hannah Biedka will get the keys to her new house next week.

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.”

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