Time is right for buyers

WANT to save at least $50 a week while living in the city’s north?

Buy a home and treat yourself to 10 coffees on the money you save.

A new report has revealed tenants in the fast-growing northern corridor are paying at least $2600 a year more in rent than it would cost to pay off their own home with a 5 per cent deposit.

ANZ’s latest housing affordability study shows residents in the city’s north are spending on average 38.7 per cent of their income on a mortgage, while renters are forking out 40.1 per cent.

Households in the region are taking home a median $1241 a week. The median price for a dwelling in the city’s north is $470,720. The median rent is $498 a week.

However, weekly repayments on a 30-year loan would be about $377 for a 20 per cent deposit, $424 for a 10 per cent deposit, and $448 for a 5 per cent deposit.

Real Estate Institute of Queensland chief executive Antonia Mercorella said the record low cash rate of 0.75 per cent made “buying much more achievable to so many people”.

“One of the primary drivers behind it is that interest rates are incredibly low so we are seeing people reassessing whether it is cheaper to buy than rent,” she said.

“We are also seeing people explore other ways to own (property) rather than waiting to buy on their own, with friends or family members coming together to buy.”

Ms Mercorella warned other costs still needed to be taken into consideration when buying property, including a deposit, stamp duty, rates and maintenance.

“People also need to understand if you look at the average term of a rental property it sits at around 17 months, it’s quite short,” she said. “A mortgage is likely to be in the vicinity of 25-30 years so it’s a much longer term commitment.”

LJ Hooker Nerang principal Shane Colquhoun said while record-low interest rates were to thank for the improvements in housing affordability, rental strain was not easing.

“The big banks are still trying to achieve a 4 to 5 per cent interest rate but there are some lenders out there with high twos or (low) threes, so if people take advantage of that then, absolutely, it’s cheaper to buy than rent,” he said.

Ray White Surfers Paradise Group chief executive Andrew Bell urged people to only use the report as a guide, as median prices often reflected market activity rather than predictions. “When you talk medians it reflects the activity in a market,” he said. “Sometimes you’ll see lower prices not because it’s cheaper but it’s where the activity is.

“What the report does do, it spotlights some suburbs that people should have a closer look at if they are buying.”

If people were in a position to do so, they should look to buy rather than rent for the long-term benefits, he said.