LOW interest rates and a shortage of rental properties has made it cheaper to buy than to rent in many Gold Coast suburbs.
CoreLogic data shows the median rent on the Coast is $499 while the median property value is $533,950 (units and houses).
A weekly repayment on a mortgage of this value is $453, based on a 3.5 per cent interest rate and a 20 per cent deposit, a saving of $46 per week on the rental cost.
REIQ Gold Coast zone chairman Andrew Henderson said demand for rental properties was outstripping supply, which was leading to the increase.
“The rental demand has come from people migrating here, (there’s) plenty of construction work here too,” he said.
Mr Henderson said stamp duty increases and more stringent requirements from banks were driving investors away, further restricting the supply of rental properties.
“All of that has led to a tightening of investors getting into the market,” Mr Henderson said.
REIQ’s latest Market Monitor has the Coast rental vacancy at just 1.1 per cent.
Mr Henderson said buyers were better off making a purchase as soon as they could.
“The sooner you do it, the better it is for your long-term financial situation,” he said.
“But it depends specifically on what type of area you’re looking at.”
REIQ director John Newlands said location was just one of the factors prospective buyers needed to consider before taking the plunge.
He said people who only planned to live on the Coast for a short time were better off renting, as well as those in a tight financial position.
“If they were an investor, it’s a different scenario altogether,” Mr Newlands said.
“They do need to be able to show that they have an income to show they can manage that mortgage.”
While there were plenty of variables, he said in many cases it was cheaper to buy, especially with interest rates low.
Eddy Brown recently bought a property at Mermaid Waters and plans to rent it out for more than his weekly mortgage repayment.
He is paying $350 a week on the $387,000 property, which he said was rented out for $390 about a year ago.
“There’s good rental return on it so it’s a good investment,” Mr Brown said.
“But I’m going to live in it for a few years first.”
Buyers agent Tony Coughran, of Gold Coast Property Advisors, said the key to making long term savings was to make sure mortgage repayments were affordable.
“As long as you get into the market at an affordable and comfortable level, you can’t go wrong,” Mr Coughran said.
“As the rents go up and the mortgage repayments stay the same, it’s bridging that gap.
“Don’t look back in 20 years time and say, ‘I should’ve, could’ve, would’ve’ while our prices are tangible and affordable.”
Source: www.news.com.au
