BUYING a home has become cheaper than renting one in a string of NSW towns and cities, encouraging a growing number of Sydneysiders to make the move.
The savings from buying rather than renting have ranged from $143 a week in the city of Broken Hill in the state’s far west to $45 per week in parts of the Hunter Region.
Buying was also considerably cheaper in the town of Wellington, 350km northwest of Sydney, as well as in parts of Tamworth and Wagga Wagga.
Typical Wellington rent is $240 per week while paying down a mortgage on a home at the town’s $149,000 median house price was $97 cheaper at $143 per week.
The savings for buyers in Tamworth ranged from $60 to $69 a week, while in Wagga purchasing a home was roughly $50 cheaper.
There were more than 40 other areas around the state were paying down a typical weekly mortgage at 80 per cent of the home’s value was cheaper than weekly rent, according to an analysis of lending and CoreLogic data.
Dusk in Tamworth, where some homes are cheaper to own than rent. Picture: Tourism Tamworth
This assumed interest at 4.5 per cent — roughly the average standard variable rate — and excluded council rates and maintenance costs.
Cheaper regional real estate has been a magnet for Sydney house hunters frustrated with the crippling unaffordability of Harbour City prices.
Wagga Wagga population growth over 2016 and 2017 was nearly double levels recorded over 2013, while Tamworth has become NSW’s third largest inland city, NSW Department of Planning research showed.
Tamworth real estate agent Gavin Knee of Burke & Smyth said Sydneysiders have had a growing influence on local sales.
Most of the properties in Wagga Wagga are large brick houses.
“A large number of the people who bought Tamworth homes last year were either Sydney-based investors or Sydney families deciding to make the move,” he said.
“South Tamworth has been really popular because first home buyers can get into the market for cheaper than it would cost to rent a home.”
Former Mosman resident Andrew Maughan relocated his family to Tamworth last year and will be moving into a newly purchased home this weekend.
“We didn’t buy in Sydney because we didn’t want a $700,000 mortgage. It’s too much of a sacrifice,” Mr Maughan said.
“Here we’ve purchased a four-bedroom house and it’s actually cheaper to pay down than the Tamworth house we have been renting.”
Canstar financial services executive Steven Mickenberg said buying was cheaper than renting in much of regional NSW because prices have not been appreciating at the same rate as in Sydney.
Historically low interest rates have also been a factor, he said. “Banks are making it more difficult for some buyers to get loans but you have to remember that loans have never been this cheap before,” Mr Mickenberg said.
Mortgage Choice CEO John Flavell said first home buyers were in a particularly good position to benefit in areas where buying was cheaper than renting because the prices were typically below $650,000. This would mean the first home buyers qualified for stamp duty exemptions introduced in July.
“It’s great to see that in some suburbs it’s cheaper to buy a home than to rent one and not only will these buyers be saving money, but they’re paying off their own asset rather than someone else’s and that’s incredibly valuable,” Mr Flavell said.
WHERE BUYING IS CHEAPER THAN RENTING (by average saving)
Broken Hill $143
Murwillumbah (Tweed) $94
Singleton (units) $80
East Kempsey $74
South Tamworth $68
West Tamworth $66
Tweed Heads West $59
Mount Austin (Wagga Wagga) $51
POSTED: January 1, 2018
AUTHOR: Staff Reporter
@Jurds Real Estate – Cessnock and Hunter Valley Wine Country Property Experts – the place to buy, sell and lease property in Cessnock and the Hunter Region.