Cheaper to buy than rent in more suburbs

• Queensland highest with 147 suburbs cheaper to buy
• Adelaide has the most close to the city
• Victoria has just 17 suburbs/towns

SOFTER property prices are proving a boon to renters wanting to own their own homes with it now cheaper to buy than lease in a record 388 suburbs across the country.

The RP Data Buy vs Rent report analyses the different between monthly mortgage payments and monthly rental payments based on the median value of houses and units.

The data shows that there has been a 63 per cent increase in the number of suburbs where it is now cheaper to pay a mortgage than pay a landlord - only 238 suburbs fit the criteria back in August.

The analysis provides further evidence of just how soft property prices have become - the RP Data Hedonic Index for October released on Friday showed that nationally, property prices sank -1.4 per cent in October after four months of growth.

But for renters wanting to take the plunge, it is great news. For those prepared to pay an extra $50 a month more than their current rents and take a variable home loan, the number of suburbs on offer jumps even further to 1419 suburbs. 

Unsurprisingly, across the capital cities, it is typically apartment style housing where it is more affordable to purchase than commit to the dead money or a rental due to lower property prices.

Queensland offers the majority of suburbs and towns with 147 locations where it is cheaper to buy than rent, although most are located in regional areas including Mackay, the Darling Downs, Gold Coast and Sunshine Coast. Brisbane accounts for 42 suburbs, most of which are located in Logan and Ipswich.

New South Wales has the second highest number of options with 88 suburbs across the state where a mortgage is cheaper than renting. Units in Enmore and Rushcutters Bay are among the surprises. Those wanting to buy a unit in Enmore with an interest only loan based on 5.9 per cent, would pay $691 less a month than the current median rent, according to the estimates by RP Data.

The national research director of RP Data, Tim Lawless said the combination of soft property prices and discounted mortgage rates had combined with high rents and low rental vacancies to cause many renters to make the switch.

"In some suburbs buying may actually be cheaper than renting, especially where we are seeing evidence of tight rental markets resulting in rental increases," Mr Lawless said.

"For many renters, now may be a good time to either re-enter the market or buy their first home."

Victoria supported just 17 suburbs where it is now cheaper to buy than rent, although only three of these were close to the Melbourne CBD. The rest were in country towns including Mildura, Bendigo and around the Wimmera.

In South Australia and Western Australia, there were 48 and 44 suburbs and towns respectively, while in Tasmania and the Northern Territory there were 30 and 11. South Australia boasted a 31 suburbs out of the 48 that were located within Adelaide.

The analysis did not consider the potential for capital gains or other costs of ownership, such as stamp duty or strata title fees for units, but Mr Lawless said it offered a good starting point for renters wanting to take the leap.

The Buy vs Rent report can be downloaded free at www.myrp.com.au/buyorrent

Read more: http://www.news.com.au/realestate/buying/cheaper-to-buy-than-rent-in-more-suburbs/story-fndban6l-1226510420832#ixzz2BJib1IeZ

A few tips from REIQ on how to price your home correctly!

Everyone knows how much their home is worth. Don’t they?

  

It’s the conversation that can strike fear into the heart of even the most experienced real estate agent. A person’s home is often their absolute pride and joy. Often it has been home to wonderful family memories or the blood, sweat and tears that were poured into those stunning renovations. Then you throw the ever-discerning buyer into the mix. They have hunted the open-home trail for months, researched their preferred suburbs and compared homes upon homes. Ultimately, it is these people who will determine what your home is really worth.

 

So when it comes time for an agent to have the price-setting conversation with a seller, the reality of the market conditions can come as, well, a rude shock. It is often the case that the seller is sporting a lovely pair of rose-coloured glasses. What is a castle in their eyes could be – for lack of a better term – a shack in the eyes of the buyer.

 

When deciding how to price your property, there is often a disparity between what the seller expects and what the market is offering.

 

Here are a few key tips to help you through the price-setting process;

• Setting a realistic price will ensure you obtain your asking price and also conclude the sale promptly;
• Sellers who set a too high price on their homes can seriously damage their prospects for a quick sale;
• Facts and figures show that an overpriced property discourages serious buyers. When it remains on the market too long it redirects interest to more realistically-priced properties;
• Emotional attachment and pricey renovations often drive sellers to push the price up – and understandably so. However, unfortunately the state of the property market won’t always reflect personal circumstances; and
• Do your homework! Be sure to research the property market in your area and seek the opinion of a professional from a REIQ accredited agency;

A good start is an appraisal – an inspection to estimate the sale price of a property. An agent will appraise your property at no charge if you request them to do so.

 

This is not a ‘pluck a figure from the air’ kind of appraisal. Under the Property Agents and Motor Dealers Act, if you request the agent to provide a market appraisal on your home, the agent will provide a comparative market analysis (CMA) or written statement for your property.

 

The criterion for a CMA is comparing three properties of similar standard and style sold within a five-kilometre radius in the last six months. If an agent is not able to provide a CMA due to lack of comparable sales within your area, they must supply you with a written statement outlining how they arrived at the suggested market price of your home.

 

From the CMA or written statement, and taking into account the current property market, sellers will have formed a foundation from which to set a realistic selling price for the home.

 

In any market conditions, establishing a realistic price when selling your home is important, however, it is even more important when there are more sellers than buyers in the marketplace. After all, being an educated seller – sans rose-coloured glasses – can make the selling process much more efficient for all involved.

Queensland set to follow NSW by scrapping $7,000 first home owners grant in favour of $15,000 handout for new home buyers

The Queensland government will tomorrow announce plans to scrap the $7,000 first-home owners grant and replace it with a $15,000 handout only available for those first-home owners buying a new home.

The details of the changes to first-home owner handouts, leaked to the Courier Mail, will be announced by Queensland treasurer Tim Nicholls tomorrow when he delivers the 2012-13 state budget at 2.30pm.

It is less than the $17,000 available to first-home owners buying or building a new home under the previous Bligh government, who were eligible for the $7,000 first home owners grant and the $10,000 Building Boost.

The Building Boost ended on April 30 (applications can be lodged up until August 30) and was available to all classes of buyers.

The Queensland changes mirror a similar move by the NSW state government in its June budget, which will see the end of the $7,000 first-home owners’ grant on October 1 replaced by a $15,000 handout for those buying a new home, including homes bought off-the-plan.

The changes to Queensland first-home owner grants follows the decision by Queensland premier Campbell Newman to reinstate the transfer duty home concession scheme from July 1.

It provides a concessional stamp duty rate of 1% up to a value of $350,000, with stamp duty charged at normal rates for the remaining value of the home purchase.

The Real Estate Institute of Queensland (REIQ) expressed disappointment at the decision and warned that thousands of Queensland first-time property buyers may delay purchasing their first home following the scrapping of the long-standing handout.

“REIQ analysis of Office of State Revenue (OSR) figures show only 24% of first home buyers opted to buy a new home when the First Home Owners Boost, which featured up to $21,000 for new-builds, was in play during the GFC,” says REIQ CEO Anton Kardash.

The REIQ expects the decision to remove the $7,000 grant in favour of a $15,000 grant for new homes will impact the majority of prospective first home buyers.

‘‘The main reason for this is that new homes are usually too expensive for first-time buyers and are often located in outlying suburbs where young people do not necessarily want to live.

“New units and townhouses can also be more expensive than established and often have higher body corporate fees than older apartments.”

Kardash says the removal of the grant failed to take into consideration the complexity of the real estate market and comes as OSR figures show that over the June quarter more than 5,400 First Home Owner Grants were paid in Queensland compared to 4,000 over the same period in 2011.

‘‘The first home buyer segment of the market has been one of the few positives over recent times, so we are likely to see their level of activity decrease significantly once the grant is removed next month,’’ says Kardash.

Not surprisingly, the announcement was welcomed by residential developer Stockland, which described it as a “massive shot in the arm for the state economy” and one which would “underpin the future of the state’s housing industry” and provide thousands of jobs.

“We fully support the Newman Government’s critical boost to the Queensland housing market – it is good news for the entire state because it will increase confidence, generate thousands of construction jobs, and bring home ownership within reach of more young Australians,” said Stockland Queensland general manager, Kingsley Andrew.

“An extra $15,000 is a significant saving for first home buyers and coupled with no stamp duty, today’s announcement creates an unprecedented incentive from the Queensland Government”.