Renters win in home cost comparison

THE Gold Coast is one of only two regions in Queensland where the cost of buying a house is still greater than renting despite record low interest rates, a new report says.

The Aussie Core Logic Rent Versus Buy Report found that it was now cheaper to buy than rent in about 70 per cent of the regional Queensland suburbs analysed for the research.

The Gold Coast and Sunshine Coast are the exceptions, with Ashmore the only local suburb identified where people are better off paying the bank rather than a landlord. Those paying off a house in Ashmore on a three-year fixed term could save up to $286 a month. It is still cheaper to rent a house than buy one if your loan rate is variable, the report found.

The potential savings are better for unit mortgages with three-year fixed terms – up to $507 in Surfers Paradise and Southport.

Aussie CEO James Symond said people wanting to get on the property ladder should not be discouraged from buying in a hot market.

“A lot of people are looking to the Gold Coast as a lifestyle haven and a safe place for their family, which is impacting prices,” he said.

“Even though the Gold Coast is bucking the trend in terms of rent being cheaper than a mortgage, the difference is soon balanced by price growth in this robust market.”

Mr Symond said using a mortgage broker was key to securing the most competitive rate and navigating changes to lending criteria.

“Getting credit is not what it was a year ago and having that pre-approval in place before you go shopping is a must,’’ he said.

“The average mum-and-dad buyers are paying around 3.65 per cent and a mortgage broker will do the legwork to get that down by 0.5 to 1 per cent for you.”

Research for the report compared median rental costs with monthly mortgage repayments on a discounted variable rate and a three-year fixed rate, and assumed a loan-to-value ratio of 90 per cent whereby the buyer has a 10 per cent deposit. It also took the life of the loan to be 30 years.