In the context of the spread of the rental crisis, buying a property today is not “as difficult” as many home buyers think.
According to a survey by Great SouthernBank, 40 per cent of first-home buyers are paying less than their rent.
A total of 1,500 people participated in the survey, of which 42 per cent of homeowners spent less on a mortgage than renting; another 26 per cent said the cost of a mortgage was similar to that of renting.
Great Southern Bank chief customer officer Megan Keleher said the survey showed many homebuyers were overestimating their mortgage costs.
“It’s clear from this survey that first-home buyers are spending more on rent than on home loans, and given the tight rental market right now, this is only going to become more pronounced.”
“Actually, for buying a house, the biggest obstacle is not to repay the loan, but to save the corresponding down payment.”
In regional areas, almost twice as many homeowners saw their housing costs fall as their housing costs rose.
Ray White chief economist Nerida Conisbee said with so many incentives and a slowing housing market, buying a home looked much better than renting.
“It’s an extremely challenging time for renters right now, with rents surging more than 17 per cent since the onset of the pandemic and showing no signs of slowing down. But prices are different and the market has eased a bit,” Conisbee said.
“Even with the rate hike, the number of first-home buyers spending less on mortgages than renting is likely to increase this year,” he said.
Keleher also said it’s not surprising that buying a home is more affordable than renting.
“Interest rates have been at record low levels for some time now, making home loans more affordable”.
“There are also a range of home buying schemes for first home buyers that can help reduce the amount of loan a homebuyer needs to borrow.”
Keleher also added that “the sooner people get into the housing market, the more time they have to pay off their mortgage and upgrade to a better property”.
“And in the long run, the situation of owning a property and renting is completely different, especially when it comes to retirement.”
“As an example, for someone who started renting in Newtown 10 years ago, the rent he would have to pay would only go up exponentially.”
“While buying a house at the same time and paying the same interest rate as 10 years ago and owning a property of their own, why not do it?”