The gap is narrowing between renting and buying in Sydney, prompting first-home owners to take the plunge into the property market. If buyers take out an interest-only loan, it can be cheaper to buy than to rent.
A combination of slashed interest rates, increasing rents, falling house prices and generous first-home buyer grants means that for the first time in many years, buying has become an economical option.
Agents are reporting large numbers of first-home buyers at property inspections.
Figures compiled by The Sun-Herald show that repayments for a median-priced property of $536,000 in Sydney - taking into account the most recent rate cuts - are $592 a week. A similar-priced property can rent for between $450 and $550 a week.
If the buyer takes out an interest-only loan, the repayments fall to $461 a week - about the same as, or cheaper than, renting.
Australian Property Monitors' senior economist, Liam O'Hara, said conditions were advantageous for first-home buyers. "The gap is narrowing [between buying and renting]," he said.
Interest rates have fallen 4 percentage points since September, while federal and state government first-home buyers grants have been boosted to a maximum of $24,000 for new properties.
Also, Sydney house prices fell 4.2 per cent last year, while landlords increased rents by 16.9 per cent, according to APM data.
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http://www.domain.com.au/Public/Article.aspx?id=1234028173870&index=NationalIndex&headline=Don++39;t bet your house on it...but it can be cheaper to buy.
A combination of slashed interest rates, increasing rents, falling house prices and generous first-home buyer grants means that for the first time in many years, buying has become an economical option.
Agents are reporting large numbers of first-home buyers at property inspections.
Figures compiled by The Sun-Herald show that repayments for a median-priced property of $536,000 in Sydney - taking into account the most recent rate cuts - are $592 a week. A similar-priced property can rent for between $450 and $550 a week.
If the buyer takes out an interest-only loan, the repayments fall to $461 a week - about the same as, or cheaper than, renting.
Australian Property Monitors' senior economist, Liam O'Hara, said conditions were advantageous for first-home buyers. "The gap is narrowing [between buying and renting]," he said.
Interest rates have fallen 4 percentage points since September, while federal and state government first-home buyers grants have been boosted to a maximum of $24,000 for new properties.
Also, Sydney house prices fell 4.2 per cent last year, while landlords increased rents by 16.9 per cent, according to APM data.
more
http://www.domain.com.au/Public/Article.aspx?id=1234028173870&index=NationalIndex&headline=Don++39;t bet your house on it...but it can be cheaper to buy.
