BUYING a home is cheaper than renting in 13 Hunter suburbs, with the Central Coast also representing bang for the owning buck, new industry data reveals.
RP Data’s ‘‘Buy vs. Rent’’ report shows that paying a mortgage is on average more affordable than paying rent in Windale, Singleton Heights, Muswellbrook, Fern Bay, Bolton Point, Hunterview, Raymond Terrace, Mount Hutton, Woodberry, Gillieston Heights, Elermore Vale, Singleton and Salamander Bay.
Central Coast locations that offer the same value are Watanobbi, Mannering Park, Tuggerah, North Gosford, Ourimbah, Charmhaven, Wyong, Wyoming and Toukley, the report found.
The RP Data results are calculated on median houses and unit values in September 2012 and based on a variable mortgage rate of 5.90per cent interest per year with repayments monthly over 30 years, and a 10per cent deposit.
For prospective buyers willing to dedicate an extra $50 a week over and above standard rentals, the list of potential locations grew significantly.
In the Hunter, 68 suburbs were identified where typical mortgage repayments would be less than $50 extra a week than renting. The calculations were done using the scenario of a variable interest rate and repaying principal and interest.
If interest-only loan repayments were considered, the number of suburbs increased to more than 150.
Ray White Charlestown agent Darren Penn said the data accurately reflected the Windale market, where he said house prices were low, and this was compared to ‘‘really high’’ rental fees.
‘‘A three-bedroom home will comfortably rent for $350 a week but the unusual fact is that a home like that can still be purchased for only $250,000,’’ Mr Penn said, adding that there were many ex-government homes that could be spruced up cheaply and rented profitably.
‘‘But Windale is a unique suburb in that respect, because if you move across a few suburbs to Charlestown that same three-bedroom home would be worth $100,000 more and still attract similar rent – so once the land value goes up the rent value doesn’t go up accordingly.’’
Maitland-based property consultant Jill Haggarty, a principal at David Haggarty First National, said older homes in Gillieston Heights had become increasingly popular and could represent good value for buyers. However she warned that each property should be considered on its own merit, taking in issues including location and transport.
Neil Harle, a property consultant at Avery Property Professionals who operates in the Toronto area, said the data relating to Bolton Point could apply in some areas of the suburb but not others, for example waterfront properties. He said while it could be cheaper to buy than rent it was crucial that buyers had a good deposit, ideally at least 5per cent of the purchase price ‘‘but the more the better’’.
JOHN and Hannah Lucas did their homework and shopped around before deciding to buy in Elermore Vale.
The couple, who are currently renting in Bolton Point, chose a home in Croudace Road because it was close to work and 15 minutes from both Newcastle and Lake Macquarie.
‘‘We looked around at a few different suburbs but Elermore Vale was the most central without being in a dodgy area,’’ Mr Lucas said.
‘‘We knew it was a bit more affordable as well; we were looking for something around the $350,000 mark or under, and for that we got a three-bedroom place with a big backyard in Elermore Vale, which we were really impressed with.’’
Mr Lucas, a school teacher at Charlton Christian College at Fassifern, said the couple specifically targeted suburbs where it was more affordable to have a mortgage than rent.
‘‘It’s not cheaper to begin with but after a while it becomes clearly more affordable because you’re investing in an asset,’’ he said.