Suburbs where it’s cheaper to buy than rent

First-home buyer Jasmine Tsiatsias bought a one-bedroom apartment in Essendon after she was unable to find a rental property that fit her budget in Melbourne’s inner north.

“Obviously it’s a big cost upfront to pay a mortgage, but when I went to the bank to ask about the potential mortgage repayments on this apartment, it turned out to be cheaper than the $650 to $700 a week that a rental property would require, so it seemed like a better option,” Tsiatsias said.

The 25-year-old teacher, who previously rented in a sharehouse in Flemington, said she was now paying $50 less a fortnight in rent. Even after taking into account owners corporation fees, her wallet was fatter.

“I figured if I was paying the same or more in rent and I was able to buy a home, I might as well put that money toward a home that would eventually add value to my property, rather than paying someone else’s mortgage,” she said.

The average weekly mortgage repayment for an Essendon unit is $558.76, while the average weekly repayment for a house in Flemington or Brunswick is $650.

Adam Hicks, Ray White Ascot Vale sales principal, said renters living in the inner north often chose areas such as Essendon and Travancore when buying their first home because they offered affordable homes and were close to the city.

“We expect prices to go up at some point. Some of these apartments have been stagnant for a while … it’s a pretty attractive price point for buyers,” he said.

Hicks added Investors are sellinggiving first-time homebuyers the opportunity to buy apartments at a lower price.

Property Home Base Victorian manager and buyer’s agent Joe Dunbar said it was a common trend for first-home buyers to buy one-bedroom apartments in older neighbourhoods.

“We usually recommend boutique apartments,” he said. “They have lower corporation fees and generally hold their value much better. They’re a solid building and are much smaller than a block of 400 people.”

Dunbar said that Victorian Home Buyers Fund Shared Equity ProgramBuyers only need to pay a 5% deposit, which can help renters get into the property market.

“I would strongly advise first-home buyers that if they are able, they should seriously consider entering the market by any means possible, and that means … paying off their own mortgage, rather than paying off someone else’s mortgage.”

Biggin & Scott Stonnington director Michael Tynan is seeing renters who want to continue living in areas such as South Yarra and Prahran turning to Bank of Parents Help buying an apartment.

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It costs $550 per week to rent an apartment in South Yarra. Based on the average weekly mortgage repayment, homebuyers would have to pay $104.71 more per week to own the same property.

“If it’s a good old building and the price is right, then mum and dad will come in and say, ‘We’ll help you,’ ” Tynan said.

“We’re seeing people saying, ‘Well, it’s cheaper to buy than to rent, and you actually own an asset.’ So they’re looking to get into the market for that very reason.”