Perth verdict: rent is the cheapest option
Such is the state of the property market in the West; it is now cheaper to rent than to shell out for a home mortgage Perth. This is the case with all suburbs, an analysis has shown.
THERE are now no Perth suburbs where it is cheaper to buy a house than rent one, according to new research from the REIWA.
The research compared the median monthly rental with loan repayments on a mortgage based on its median house price.
REIWA President Suzanne Brown said it was clearly cheaper to rent than buy and assuming tenants would or could buy when an investor sold was unrealistic.
“Five years ago, it was easier to make the transition from renting to home ownership,” she said.
“But due to strong house price growth and the significant increase in interest rates from the record lows during COVID, mortgages have risen considerably more than rent prices.”
The average loan in Perth is now about $720,000 and the monthly repayment has increased from $1,902 in the March 2022 quarter to $4,428, which is 132.8 per cent higher.
By comparison, median rents have increased 62.2 per cent over the same timeframe.
“Assuming a tenant will be able to buy a home if an investor sells the property, they are renting is unrealistic,” Ms Brown said.
For tenants aspiring to house ownership within the same suburb, the most economical prospects were Bullsbrook, Stratton and Midland.
Mortgages payments were no more than 15 per cent greater than rent payments in these suburbs.
The unit market offered better opportunities.
“There are eight suburbs in Perth where the median monthly mortgage is less than the median monthly rent,” Ms Brown said.
“Glendalough has the greatest different, with its monthly mortgage of $2,505 being $442 cheaper than monthly rent costs of $2,947. That’s a 17.7 per cent difference.
“West Leederville and Belmont are the next best options, with differences of 4.6 and 2.4 per cent respectively.”
