Mortgage repayments are now cheaper than rent in some Australian suburbs. Is yours among them?

High rents and falling property prices have opened a rare window for Australian tenants to become homeowners, with mortgage repayments cheaper than rent in dozens of suburbs.

Guardian Australia’s analysis of Cotality data shows that median rents in inner-city Melbourne, suburban Canberra and Darwin are now nearly matching weekly home loan repayments.

In one in 10 suburbs and towns across the country, repayments are less than $200 a week higher than rent, for the typical property. In some suburbs, they are actually cheaper.

Australia’s median rent prices rose 5.5% over the year to September to reach $713 per week, Cotality data shows. The median property price across houses and units was flat over the year, after six months of steady falls.

The typical rent for a Melbourne apartment was $628 a week after rising 4.8% over the last year.

The typical repayments for a Melbourne flat were $211 more, or $839 a week, based on a median value of $624,740 in September, down nearly $25,000 from a year earlier.

The analysis assumes a new 30-year loan of 95% of the value, at a 6.2% interest rate. It does not account for any additional costs. Smaller loans made with bigger deposits would make repayments even more affordable compared with rents.

Owner-occupiers purchasing with a 5% deposit would typically do so through the government’s low deposit scheme, which is designed to help first home buyers.

Repayments were cheaper than rent for the typical property in Carlton, Melbourne CBD, Notting Hill, Travancore and Southbank.

Repayments on new loans had risen overall in the last year for most suburbs, as lower values were offset by interest rates rising 1 percentage point. Where values had fallen more than 10%, though, repayments were likely lower.

Clint Waters, a Melbourne mortgage broker, said home buying interest had dropped but renters were inquiring in strong numbers as they weighed lower house prices against higher rents.

“They’re certainly doing the maths … [and] the equation at the moment is starting to narrow,” Waters said.

Waters, director at Axton Finance, said a stable or growing number were looking to buy direct from their landlord, making the switch without moving.

“Landlords are getting slammed left, right and centre, and going ‘screw this, I’m going to offload,” Waters said. “Tenants will ring us up and say, ‘I need to work out if I’ve got the capacity to buy this thing.’”

New apartments pushing down prices

In Sydney, repayments were just $100 a week more than rents in inner-city Ultimo and western suburbs Warwick Farm, Rosehill, Liverpool and Granville.

In the Canberra suburbs of Belconnen and Phillip, repayments were less than $75 a week more than rents. If only apartments are included, Braddon, Lyons, Gungahlin and Harrison join the list.

Gerard Burg, Cotality researcher, said areas with significant apartment development tended to be cheaper to buy than rent, especially where flats were being sold direct to owner-occupiers and not rented out.

“That just [shows] this influx of supply pushing down the value of the purchase, while comparatively tight rental availability had led to this increase in rents,” Burg said.

But such areas were “anomalies”, he said. Houses remain generally more expensive to buy than rent.

“If it was a sustained thing that you could buy a property more cheaply than renting it, then everyone would buy and everyone would exit the rental market,” Burg said.

It was cheaper to buy in a quarter of suburbs in Darwin, where rents have risen 11.6% in the year. Most areas where buying was cheaper than renting were mining or resource project areas in which fly-in fly-out workers temporarily rent rather than buy, Burg said.

Burg said mortgage repayments would likely fall if the Reserve Bank held rates steady and values kept falling, as expected by financial markets, potentially narrowing the gap with rents.

“[With] rents continuing to increase or … go sideways, that could occur.”