• New data released by REA has found it is cheaper to buy than rent over a 10 year period almost everywhere in Australia.
• The figures found that lowered mortgage rates were the main driver of favourable buying conditions.
• Its findings show that more than 80% of houses and almost all units, outside of NSW and Victoria, were more affordable over a decade if the owners bought rather than rented the property.
• Visit Business Insider Australia’s homepage for more stories.

It will be cheaper to buy a three-bedroom house in nearly six in 10 suburbs than rent it over the next 10 years, according to new research published by REA.

The findings come despite record-breaking property prices that have seen capital city house prices skyrocket by an average of 5.7% in the first quarter of 2021.

New analysis by the property advertising agency found that low mortgage rates are likely to offset the additional costs of owning a home, with interest rates currently fixed below 2% per year and the Reserve Bank of Australia committed to maintaining low interest rates until at least 2024.

The findings, published in REA’s Insights Buy or Rent Report, highlighted areas across Australia’s states and territories where it was cheaper to buy than rent, according to cost projections over 10 years.

It is based on the assumption of a 20% deposit, along with the associated costs of buying, holding a mortgage and the overall costs of renting.

It also accounts for a modest 3% price growth each year over the next decade.

The report found it is cheaper to buy than rent around 57% of homes across Australia, however it noted the results differ by property type.

Just over half of houses are cheaper to buy over the next 10 years, with 75% of units more affordable.

The report showed that apartments in Sydney’s middle and outer suburbs are more affordable to buy than rent, with house-hunters seeking more space facing only marginally more expensive house prices outside of inner-city regions.

In Sydney and Melbourne overall, renting remains the less costly option, with 70% of houses and 40% of units remaining cheaper to rent than buy over a decade.

Buying conditions are particularly favourable outside of NSW and Victoria, the report found, with more than 80% of houses and almost all units outside of Australia’s two most populous states estimated to be cheaper to buy than rent.

Of the standout regions where investing in property makes more financial sense than renting, the Northern Territory was particularly notable.

In 98% of NT suburbs buying came out as the best option, followed by Queensland where 85% of suburbs showed buying was more affordable.

Paul Ryan, REA group economist and author of the report, told the Australian Financial Review that falling mortgage rates have made a significant difference to housing affordability.

“It’s really about low borrowing costs, which is expected to stay low for an extended period of time,” he said.

“Interest rates can be fixed below 2 per cent per annum and the RBA has committed to maintaining low interest rates until at least 2024.

“At the same time, rents haven’t fallen as much as borrowing costs, and this creates favourable buying conditions across the country.”

While the findings highlight the value of buying in much of Australia, the report also recognised the barrier the market’s prohibitive costs posed to prospective buyers, noting its analysis assumed buyers already had access to the 20% deposit required.

“Saving a deposit remains the biggest challenge for many buyers as prices have risen, particularly for those entering the market for the first time,” the report noted, adding that many would-be buyers can already afford loan repayments, but struggle to save a deposit while renting.

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