Is cheaper to buy or rent in Perth?

With Perth vacancy rates at all times lows, the demand for rental properties in our city shows no sign of letting up any time soon. Of course, in line with limited supply and ongoing interest rate rises, weekly rent is also rising. It has renters all over Perth wondering where things are headed with rental affordability and if it is cheaper to buy or rent in Perth right now.

The added financial prices of increasing rents, along with the uncertainty of secure housing, as landlords consider their options of capitalising on an extremely tight market, has many renters now questioning if they would now be better off buying their own home. 

PropTrack economist Angus Moore said the market in Perth was one of the tightest in the country, comparable with Adelaide.

“Rental markets are as tight as they’ve been in decades,” he said.

“The pace of growth we’re seeing in rents is certainly unusual, and that’s certainly putting a lot of strain on renter households at the moment.”

Mr Moore said Adelaide and Perth were seeing rental rates below 1 per cent, with other cities being below 2 per cent.

Historically, renting has often been the more affordable option, however in some instances we are finding that the more favourable option for some clients is to apply for a home loan and purchase a property. 

Depending on which area of Perth you want to live, the size of the home you need, and whether or not you’re eligible for any home loan grants, it may just be that the timing and the circumstances make this option more attractive than it has been in the past. 

As rental affordability becomes more of an issue, you may be wondering if you can afford to buy a home of your own.

With lots of moving parts to consider to ensure this is a smart option for you and your situation, it is crucial to work with a mortgage broker to establish your borrowing capacity and how much home loan deposit you will need, along with careful consideration of what type of home loan would be best for you. 

We are currently working with plenty of clients in this situation, so please get in touch if you’d like to discuss your options.