Better off buying a unit than renting

GOLD Coasters could save hundreds of dollars a month by buying a home instead of renting – if you can find one – new research shows.

Paying off a home loan for a unit with a 10 per cent deposit is cheaper than signing a lease in 27 suburbs, data from comparison site Finder shows.

The suburbs included Robina, Surfers Paradise, Burleigh Waters and Benowa.

An extra 11 suburbs were added if buyers forked out a 20 per cent deposit.

With the larger deposit, repayments on a unit in Parkwood and Helensvale were 40 per cent less than rent, and 35 per cent less in Bundall.

That’s a saving of up to $700 a month.

Homeowners could also save on repayments on units in Mermaid Waters, Elanora and Runaway Bay.

Even in Mermaid Beach – home to Multimillionaires’ Row – loan repayments on a unit came in just less than rent.

But for houses, it’s still cheaper to rent in all but six suburbs. They are: Springbrook, Worongary, Ormeau Hills, Helensvale, Pimpama and Springbrook.

Gold Coast Property Sales and Rentals director Tina Nenadic said young home buyers set themselves up for long-term wealth creation through capital gains.

Even if house price growth slowed with rising cash rates, rents would keep going up in the current tight market.

“It can be a scary prospect for first-home buyers when there’s predictions of five or six interest rate rises ... but if you do your research you’ll find it’s less to own a unit or a duplex and pay off a mortgage than paying rent,” she said. “That’s inclusive of the body corporate or building insurance fees.”

While Aussies coveted the dream of owning a freestanding house with a yard, firsthome buyers should keep in mind the property ladder has many steps.

Property manager Jessica Melling, of LJ Hooker Property Hub, said saving a deposit while still paying rent was a significant barrier for many.

Vacancies on the Coast plunged to a record low of 0.4 per cent in March, while rents were up 30 per cent since last year on houses and units combined, SQM Research figures show.

“While these areas may be more affordable, if they are buying with a deposit of 10 per cent or less than you also have to factor in lender’s mortgage insurance, plus stamp duty if the home costs more than $500,000,” Ms Melling said.

Buyers agent Oliver Dunstan, of Rose and Jones, said rentvesting was a savvy option. “Those wanting to get into the property market, but without the means to buy where they want to work and live, could look at investing in other areas whilst continuing to rent.”

Finder’s data analysed markets in 59 Gold Coast suburbs. The research assumed the average variable discounted owner-occupier home loan interest rate of 3.6 per cent, and 30-year loan term. The cost of lender’s mortgage insurance was excluded from the data.