Where this week’s rate cut makes it cheaper to own than rent in SA

Another interest rate cut would make buying cheaper than renting – but only in another four South Australian suburbs or towns, taking the total to 26, new data shows.

According to comparison site Finder, it is currently cheaper to buy than rent either a house or unit in just 22 SA suburbs or towns.

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Tuesday’s announcement by the Reserve Bank of Australia to cut the cash rate by 25 basis points to 3.85 per cent effectively unlocked four suburbs for unit buyers hoping to get off the rent roundabout – Lightsview, Tonsley, Mawson Lakes and St Clair, adding to New Port, Whyalla Playford, Whyalla, Walkerville and Adelaide city where it was already cheaper to buy than rent.

WHYALLA – Steelworks, industrial, file shots. 14 March 2025. Picture: Dean Martin

Interestingly, another cut of the same size would not unlock any more suburbs.

The latest cut made no difference to how many suburbs or towns it’s cheaper to buy a house in – that held at 13, with all of them located in regional SA.

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But the good news is, for those looking to buy, a future interest rate would unlock four more towns where you’re better off owning than renting – Woodville Gardens, Whyalla Jenkins, Tumby Bay and Berri.

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Just don’t expect to see huge savings. In these towns mortgage repayments will be just $15, $10, $7 and $6 less than monthly rents respectively.

Finder’s calculations were based on a 30-year mortgage with 20 per cent deposit at the home loan rate of 6.06 per cent per annum.

Tuesday’s 25-basis-point cut brought this down to 5.81 per cent per annum and another 0.25 per cent cut would bring this down to 5.56 per cent per annum.

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

Finder personal finance specialist Taylor Blackburn said buyers needed to keep in mind their calculations didn’t include a 20 per cent deposit, stamp duty and other associated purchase costs.

“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 or a refi (refinancing).

“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.”

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Port Pirie West house owners save the most under Tuesday’s cut.

Already $152 a month better off by owning than renting, Tuesday’s cut increased that to $158, while another cut would stretch that to $163.

Unit or apartment owners in New Port were the biggest metropolitan savers after Tuesday’s announcement.

Already $99 a month better off by owning than renting, Tuesday’s cut put another $13 in their pocket, with future cut of the same size putting the same amount in again.

Real estate agent Kate Smith at New Port SA. Picture: Ben Clark

Kate Smith, who is selling an apartment at 208/12 Wirra Dr, said it was important buyers do their research.

“We recommend people work closely with a preferred broker because they can give you peace of mind as to what the best move is for you financially,” she said.

“In my opinion it’s always better to purchase than rent.

“We had some pretty extreme cycles over the past five years but the market isn’t showing any signs of slowing.

“If you own a property, you’re going to see the benefit of any capital appreciation, whereas as a tenant you don’t.

“It’s great that in this market there are suburbs like New Port where you can own for less than rent, and get an excellent lifestlye for your money.”

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