Despite 13 interest rate rises creating unprecedented pressure on mortgage holders, within over a third of homes across Australia, it’s now cheaper to buy than rent… that’s assuming you can find a property to rent.

This is the latest finding within the national analysis of estimated purchase and rent prices released by PropTrack today.

Buying conditions favour units

PropTrack data suggests buying conditions remain more favourable for units, with over half (55%) estimated to be cheaper to buy than rent, while 29% of houses across the country are now cheaper to buy.

PropTrack’s Market Insight Report identifies Qld, Tasmania and WA as having the highest proportion of homes where the scales favour buying over renting.

Overall, WA has the highest proportion of homes (78.7%) where it’s cheaper to buy than rent, followed by QLD where the ratio is over half (53.3%).

Buying conditions to rebalance in 2024

PropTrack’s senior economist Paul Ryan notes many of the capital cities, where buying conditions are most favourable, reflect recent unit development, where prices are low compared with rents following record rent growth.

Ryan believes a record pace of rent growth – with advertised rents up 14.6% over the past year – has offset higher buying costs in many regions.

“Buying conditions remain strongest in Queensland, South Australia and Western Australia, which points to continued upward pressure on prices in these regions,” Ryan said.

“Looking to 2024, higher interest rates will challenge housing affordability for many. This may slow price growth and rebalance buying conditions across the market.”

Rental crisis

To put Australia’s rental market crisis in context, CoreLogic data reveals a collapse in vacancy rates to a record low of 0.9% across the combined capital cities.

SQM Research managing director, Louis Christopher, expects the situation to deteriorate further in 2024, due in part to the collision of overseas migration, soaring to record levels and dwelling construction simulteanously collapsing.

Christopher has forecast 7% to 10% growth in average capital city rents in 2024, led by the four largest capital cities: