Thousands of Australians are finding it is now cheaper to buy a property and service a mortgage than it is to rent the same property.
Analysis from property research firm CoreLogic shows the portion of properties where it is cheaper to buy than rent is growing, with the national level now at 36.3 per cent.
Prior to the COVID-19 pandemic, that figure was lower at 33.9 per cent.
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CoreLogic's analysis – which used a set of mortgage assumptions and valuation estimates – shows that it is generally cheaper to buy than rent in regional areas.
In regional Northern Territory, a staggering 96.4 per cent of properties are cheaper to buy and pay off than rent, while in Darwin that figure is 86.5 per cent.
In Australia's most expensive property market of Sydney, just 4.9 per cent of properties were deemed to be cheaper to service a mortgage than to rent.
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It was a similar story in Melbourne (7.3 per cent), while both Brisbane (55.3 per cent) and Perth (59.6 per cent) offered value to potential buyers.
"CoreLogic analysis suggests servicing a mortgage is now cheaper than paying rent on 36.2 per cent of Australian properties, which is higher than the pre-COVID proportion of 33.9 per cent reported in February last year," Eliza Owen, Head of Research Australia at CoreLogic, said.
"The increase in areas where it is cheaper to service a mortgage than to pay rent across Australia, when compared with pre-COVID analysis, is a reflection of much lower interest costs on mortgage debt since the onset of COVID-19.
"Average new mortgage rates for owner-occupiers have fallen from 3.21 per cent in February 2020, to 2.40 per cent as of May 2021, according to RBA data."
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Ms Owen said despite historic low interest rates, the boom in property values in some cities has seen the portion of properties that are cheaper to buy remain low.
"However, reduced interest costs have not led to cheaper mortgage serviceability relative to rents in every instance," Ms Owen wrote.
"This is especially the case in Sydney, where property values have increased markedly against low interest rates, pushing up loan principals (the amount borrowed) and outpacing growth in rents."
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Ms Owen said while the analysis does not necessarily highlight areas in which people want to actually live, it proves that buying may be a better financial option than renting for some.
"The low interest rate environment is still conducive to better serviceability in many parts of the country," she wrote.
"The analysis is a good reminder for renters to weigh up housing costs and savings, to see if it is time for a change in tenure."
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