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AS INVESTORS RAMP UP ACTIVITY, IS AUSTRALIA BECOMING A NATION OF RENTERS?

Friday February 28th, 2014

Australia’s property market continues to see strong growth but first home buyers are increasingly being left behind.



In Sydney and Melbourne, the cost of renting is in fact less than paying off a mortgage, according to the latest analysis from Onthehouse’s property research arm, Residex.

According to the latest data, the number of first time buyers hit historical lows in December 2013, to just 7% in New South Wales, 12% in Victoria, and 12% in Queensland.

The national median value of houses and units increased in 2013 by 5.25% and 6.4% respectively.

With prices going up and with affordability falling across the country, the value of loans to investors increased by 2.3% in the final quarter of 2013.

For landlords and investors, this essentially means a bigger pool of renters – giving an added incentive to purchase residential property.

In regards to affordability, the proportion of income necessary for renting or buying means that for many, it costs less to rent than buy.



In Sydney, buyers can expect to pay 39.39% more per month on loan repayments on a median-valued house than it would cost to rent, while in Melbourne it is 50.72% higher.

Source:PropertyUpdate.com.au

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