Data shows it's cheaper to buy than rent in many capitals

New analysis shows that it's now cheaper to buy an apartment or unit than to lease one in many major Australian capital cities.

Transcript

00:00 PropTech says that the reason why it's become more affordable to buy an apartment that you're

00:07 living in rather than rent it for 10 years is not because it's getting cheaper to buy

00:12 a property but because the cost of rents have still been soaring by so much. They did used

00:18 to have around a quarter of properties, that's both houses and units in the market, analysed

00:25 as being better off for you financially if you owned them rather than rented them for

00:29 two years but those numbers have really risen up to around a third of the properties on

00:34 the market. And when you look at the disjunct between houses and apartments, it's really

00:40 apartments that are particularly affected by this trend. There's this graph that PropTrack

00:46 has put out where it shows that in markets like Sydney, 42% of units, that's including

00:52 apartments, are better off for you if you own them rather than pay the rent on them.

00:56 Melbourne around the same rates and in places like Perth we've got numbers up to 92% of

01:02 units in those places. As you'll see in markets like Sydney and Melbourne where properties,

01:08 homes are more than a million dollars to buy, it's still obviously much more financially

01:14 affordable for you to buy those places rather than rent them out for 10 years but of course

01:18 as we know, first home buyers are really struggling to get into those sorts of places to save

01:24 up the deposits to afford them. So Amelia, essentially you're better off buying an apartment

01:29 in many places than renting one but as you say for many people that's more easily said

01:33 than done. That's correct. As I mentioned, the only reason why you're better off financially

01:40 buying these places than renting them is just because the rent is getting so far out of

01:44 reach. One housing analyst I spoke to about this data says that it's a very depressing

01:49 data set because obviously it also indicates that if you're currently renting, you're paying

01:54 more on rent which is making it harder for you to save for that deposit. We know that

02:00 for people who don't own currently in the market in Australia, it's taking them between

02:05 10 to 14 years to save up the requisite 20% deposit. That housing expert I spoke to, Nicole

02:13 Goran at the University of Sydney, she says this really shows how we need far better planning,

02:18 especially in high density areas for more social and affordable housing. So that's her

02:25 suggestion. We know that the federal government has a federal policy to bring in 30,000 new

02:30 social and affordable homes but as Nicole said, that is really a deficit for what is

02:35 needed at this point.

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