suburbs where it is cheaper to buy than rent

[Intrinsic_Value]

http://images.smh.com.au/file/2013/...20Rent%20Report%20June.pdf?rand=1373602240413

http://www.theage.com.au/business/w...e-692-ideas-20130712-2puo9.html#ixzz2YngOz35i


Happy to see the suburb of Melbourne in there.

My properties are a bit more than 20% more expensive than the stated median but then the rents are a bit more than 20% higher as well.

Don't think that the comparisons consider the all in costs of holding a property though, like council rates, body corporate fees etc, repairs and maintenance

 

[redwing]

Just monthly mortgage V rental payments considered, or ALL Landlords costs?

 

[hobo-jo]

Just monthly mortgage V rental payments considered, or ALL Landlords costs?

+1, as usual this comparison probably doesn't accurately portray the real cost of ownership.

Are transaction costs like stamp duty included?
LMI if you are buying with small deposit?
Building insurance?
Council rates? Water?
Strata fees for units?
Ongoing maintenance of the property?

I can't speak for all the states, but of those in SA most of them are pretty undesirable suburbs or regional.

 

[Peter Parker]

There's two types of area that feature on lists like these:

* Smaller regional areas with cheap housing and moderate rents (so higher yields)

* City areas with tiny student apartments

Country areas can have quite high rates and insurance costs as a % of expenses. Add those on and actual holding costs may be double interest alone (especially if also paying principal down).

City areas on that list are dominated by student dogbox apartments that you can't necessarily buy as an OO even if you wanted to. Also banks may not lend much on them. Body corp fees can be high so again nearly double interest costs. As soon as you exclude specialist student and studio type places then average prices rise greatly, yields drop and owning becomes far dearer than renting.

The soundest places on the list in Vic are some of the larger regionals. Though Norlane, Corio, Maryborough, Moe, Morwell are low income areas but the first two are part of a larger urban complex.

 

[Deltaberry]

Properties going up. Writing was on he wall. Who cares if it includes all landlord costs or not.

 

[Intrinsic_Value]

* City areas with tiny student apartments



City areas on that list are dominated by student dogbox apartments that you can't necessarily buy as an OO even if you wanted to. .

Except city of Melbourne, yes city of Melbourne has student apartments but as a proportion of total apartments available in the city its not excessive, hence not the significant distortion in prices.

If you want to see the impact that student apartments have, look at carlton which is also listed. A very expensive suburb, but the median is distorted by the excessive number of student apartments in that suburb.

That's why I continue to push that the suburb of Melbourne represents a very good buying opportunity.

+ as I have been mentioning on other threads, car park rents are going up rapidly because of all the taxes being applied to commercial carparks. A residential carpark does not attract any of these taxes.

 

[tambourineman]

Funny how these puff pieces always come out on a Friday or a Saturday

 

[moyjos]

Pfft! I live in one of the Sunshine Coast suburbs where apparently it is cheaper to buy than rent.

Cant see it. Our unit block for instance is a great comparison as we have a few for sale at present and I know what others are paying to rent here. Not including PM fees,body corp, rates etc etc etc. the difference is around $20 per week better off renting. (that was worked on plugging the cost of a unit into a mortgage calculator at 5% over 30 years)

Would love to know how RP data get these figures. If this was the case, we should be seeing CF+ property all over the place.

 

[redwing]

Would love to know how RP data get these figures. If this was the case, we should be seeing CF+ property all over the place.

I was thinking similar for these suburbs where it is apparently cheaper to buy than rent

Its like a REA advertising a place as such, when you know it's not

 

[hobo-jo]

Properties going up. Writing was on he wall. Who cares if it includes all landlord costs or not.

Over the last 12 months perhaps, but most cities still below their peak from several years ago:

 

[nhg]

Over the last 12 months perhaps, but most cities still below their peak from several years ago:

That is the best time to buy.

 

[hobo-jo]

That is the best time to buy.

Presuming that the price growth will continue even in the face of rising unemployment and lower incomes as the mining boom fades.

 

[Shadow]

Presuming that the price growth will continue even in the face of rising unemployment and lower incomes as the mining boom fades.

When will you admit that the gloomy advice and forecasts churned out by Macrobusiness have utterly failed?

As predicted, their so-called 'slow melt' was nothing more than a normal regular cyclical correction before the next growth phase.

 

[hobo-jo]

When will you admit that the gloomy advice and forecasts churned out by Macrobusiness have utterly failed?

Macro Business? Why are you so obsessed with them Shadow?

I've had my own expectations well prior to MBs inception as you know.

This is what I said on Somersoft in Jan 2010 (MB started 6 months later):

"I now believe we will see at least 15-20% of nominal prices over all capital cities over the next few years and probably another 5+ years stagnation/low growth. It could end up being worse.

My prediction is the tipping point is Qtr 1 2010."

By mid 2012 we'd seen prices correct by around 5-15% depending on the city (was around 7% Australia wide as I recall?). We didn't see the 15-20% I expected in nominal terms, but I think this correction in real terms still has a way to go (and some cities I expect to fall lower in nominal terms than the 2012 trough).

But I guess I will leave Intrinsic_Value and others with vested interest who want to pump this site with disingenuous information (such as that linked in the OP) to their own devices... carry on.

 

[Intrinsic_Value]

But I guess I will leave Intrinsic_Value and others with vested interest who want to pump this site with disingenuous information (such as that linked in the OP) to their own devices... carry on.

lol this is very funny.

I have a vested interest? really how? my only vested interest is that I own property in Melbourne cbd.

So do you also have a vested interest?
Yes by your logic, your vested interest must be that you don't own any property..

Therefore by your definition, people with vested interests will always 'pump disingenuous (what ever that means information) to their own devises.

Those that own property will pump disingenuous information reflecting property in a positive light.

Those that don't own property will pump disingenuous information reflecting property in a negative light.

But here is the beautiful thing out of all of this.
The market will react based on a multitude of factors, that reflect thousands of individuals acting in their own perceived best interests.

Within that market place will be individuals who create financial wealth by being able to correctly interpret all that disingenuous information.

 

[Sidney]

Within that market place will be individuals who create financial wealth by being able to correctly interpret all that disingenuous information.

Well spoken. Though easier said than done. And even if you do interpret correctly, with such a volume of (disingenuous?) doom and gloom bumping about the web these days, it's quite a daunting task to act on said interpretation.

The problem, too, is the more people feel spooked by the doom and gloom, the more it becomes a self-fulfilling prophecy, because less people buying means less money circulating and a slower economy.

But for those who seriously think they can shout the house down: be careful what you wish for, because a big drop in housing prices will almost certainly bring on a recession. As happened in the US, houses will be cheap, but without jobs, the same people who were waiting for the fall will still be standing on the sidelines with no access to finance to buy the cheap houses. Or anything else for that matter.

Fortunately, so far, the doomers' evil plans don't seem to be working.

 

[redwing]

But I guess I will leave Intrinsic_Value and others with vested interest who want to pump this site with disingenuous information (such as that linked in the OP) to their own devices... carry on.

Hi Hobo

I saw IV's post as something of interest to discuss with other SS members, no agenda?

 

[hobo-jo]

You are probably right redwing, this type of article is just frustrating as they are of no real value (more like advertorials for the data provider).

This apartment sold in Melbourne today for $548k:
http://www.domain.com.au/Property/For-Sale/Apartment-Unit-Flat/VIC/Melbourne/?adid=2010520312

Equivalent rents for $530pw:
http://www.realestate.com.au/property-apartment-vic-melbourne-410408471

So based on the 5.4% interest rate used by RP Data, you are already paying $40 more per week to own it (based on 100% mortgage).

That's an additional $2080 per year.

+ $2000pa strata (probably more?)
+ $1200pa council rates (?)
+ $1200pa water (?)
+ $25k up front for stamp duty.

Cheaper to buy than rent in Melbourne? Perhaps IV can provide an example.

 

[Intrinsic_Value]

Two recant personal examples.

Example 1:
Purchase price $512
Rent $580 per week
2 bed, 1 bath, 1 car park

Example two:
Purchase price $520
Rent: $570

2 bed, 1 bath, 1 car park

Bodycorporate: around $4800
council rates around $1000.

For myself always 20% deposit

 

[Shadow]

Macro Business? Why are you so obsessed with them Shadow?

Me obsessed? You posted yet another MB chart in post #10 above.

You're the one who posts multiple links to MacroBusiness doom and gloom spruik every week.

You're a moderator on the Macrobusiness site, and your gold spruiking blog posts are often republished there, so I suppose you have a vested interest in promoting them.

Do you get a share of the MB advertising revenue for moderating the MB forum, and for regularly promoting/publicising MB blogs here on Somersoft?

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