Cheaper to buy than rent in QLD
Nisha Shrestha, D’or Shrestha, 1, and D’son Shrestha pictured at their new home at Stockland Kalina in Springfield. Picture: Josh Woning.
It’s never been cheaper to buy a property rather than rent one in Queensland, latest analysis shows.
A trifecta of federal stimulus, state grants and benefits and record low rates saw a massive swing towards purchasing, according to National Housing Finance and Investment Corporation CEO Nathan Dal Bon.
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“Currently Queenslanders have the best conditions for paying off a mortgage compared to renting in the last 15 years,” he said.
“These favourable conditions are reflected in the take up of the Australian Government’s First Home Loan Deposit Scheme (New Homes) that targets new properties, with Queensland capturing the highest share of the Scheme’s places to date.”
NHFIC head of research Hugh Hartigan said “the buying versus renting equation has turned around quite substantially”.
Mortgage repayments for FHBs are now better than median rent in Queensland. Picture: Richard Walker
NHFIC’s analysis of the monthly mortgage-repayment-to-rent ratio saw it swing to less than 0.9 per cent in Queensland through 2020, its lowest level since 2006.
The analysis, which came off the median rental payment and the mortgage repayment for the average first home buyer in Queensland, was revealed after NHFIC’s State of the Nation’s
Housing: 2021 and beyond webinar.
“Clearly when first home buyers see opportunity, they’re going for it,” Mr Hartigan said.
“It’s more in their interest to buy now, anticipating in time that they’ll get some capital growth as well. I think that comes down to this idea that housing is not just a roof over a head, it’s also a financial asset so it’s a form of savings.”
Stockland managing director Mark Steinert said strong stimulus measures were pushing many buyers into the market.
“There has been a strong response to HomeBuilder and state grants and also a period where we didn’t see prices moving which combined made a lot of buyers think it was a good time to return to the market. First home buyers have gone from 15 to 16 per cent of loan applications to 25 per cent, so that’s a 47 per cent increase.”:
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Mr Steinert expected to see “some softness” in the market after this last round of HomeBuilder ended though the market in houses would remain “quite robust for the foreseeable future”.
“When you’re looking year to year the big one is interest rates and a reasonable jobs market. If people have got jobs and rates are compelling, we historically have seen that drive strong demand.”
The Shrestha family’s new home at Stockland Kalina in Springfield was built in four months which saw them in by Christmas 2020. Picture: Josh Woning.
D’son and Nisha Shrestha are among buyers who moved into their new homes before 2020 was out, building in Stockland Kalina in Springfield using the state first home buyer grant and stamp duty concessions.
“It was a beautiful journey,” Mrs Shrestha said. “The house was built in four months. It wasn’t as tough as we thought it would be. We moved in just before Christmas.”
The family put the $15,000 FHB grant they were given straight to their mortgage.
“It helped a lot, our interest went down a bit,” she said. “The savings we spent on furniture that we wanted to buy.”