Aussie chief executive James Symond said the unusual buying conditions were a result of a consistent fall in Perth property values and mortgage rates, coupled with a hike in rent prices.
“Five years ago, less than 3 per cent of Perth suburbs were showing the cost of servicing a discounted variable rate mortgage on a house to be lower than the cost of renting,” he said.
“By September 2020, just over 35 per cent of suburbs had cheaper mortgage serviceability than rental costs.”
According to the report, the cost of mortgage repayments on a discounted variable rate mortgage for a house in Perth has fallen by about a third in the last decade, from $2873 per month to $1712.
In the unit market, the cost has plummeted even more, from $2358 per month to $1434 in 2020, with mortgage costs more affordable than rent in almost three-quarters of Perth’s suburbs.
However, the gap between the rental and the property market in Perth’s more expensive, inner-city suburbs is substantially bigger, with mortgage repayments averaging $1743 more than rent.
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Mandurah local Steve McVeigh saw the fall in prices as an opportunity to invest in his retirement and bought a four-bedroom house with the intent of renting it out.
“There’s a good market right now, it’s starting to turn and head upwards, so we thought we’d get in while it’s still down,” he told Nine News Perth.
In regional WA, buying a home is cheaper than renting in about 86 per cent of the suburbs; an 80 per cent fall since 2010.
The mining hubs of Newman and Port Hedland, as well as Kununurra and Derby, are among the most affordable to buy a home in compared to renting, with Cable Beach, Bunbury, and Geraldton some of the most affordable areas to purchase a unit in.
Mr Symond said while the report was a good indication of where it could be cheaper to buy than to rent, there were current market rates well below these averages.
“So the savings and rage of suburbs are potentially even greater,” he said.
Marta is an award-winning photographer and journalist with a focus on social justice issues and local government.
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