property
Four Northcote suburbs now cost less to buy than rent monthly
Mortgage payments on typical three-bedroom homes have fallen below weekly rents in four pockets of Northcote as of this month.
How we reported this
Buyers in Northcote now face lower monthly costs than renters in at least four suburbs, according to fresh calculations from local sales records. Median mortgage outlays dropped to $2,310 a week on July 1 while equivalent rents sat at $2,480 in the same postcodes.
The shift stems from a 0.6 percentage point fall in fixed rates since March, which cut repayments on a $520,000 loan by $170 a week. Northcote agents say the change has already pulled first-home buyers back into the market after two quiet quarters.
Street-level examples
Properties on Station Street and in the area around Northcote Plaza show the clearest gap. A three-bedroom weatherboard on Station Street sold last week for $515,000 with repayments of $2,290 a week. The same house would rent for $2,550. Northcote Housing Trust has logged 18 new buyer inquiries in the Plaza precinct since the rate cut, up from six in the prior month.
Further along High Street, near the Northcote Town Hall, two-unit sites are attracting similar interest. One investor who purchased in April now pays $2,340 a week on a $495,000 loan while the adjoining rental unit lists at $2,490. Local conveyancers report settlement volumes rose 14 percent in the first week of July compared with June.
Numbers behind the trend
CoreLogic Northcote data released on July 7 put the median house price at $498,000. At the current 4.15 percent fixed rate for owner-occupiers, that produces a $2,340 weekly repayment on a standard 30-year term. Average asking rents for the same stock sit at $2,470, according to the same report. The crossover first appeared in March when rates eased below 4.3 percent.
Buyers checking listings on Station Street or around Northcote Plaza should compare current fixed-rate offers from at least three lenders before signing. Northcote agents expect the gap to widen if rates hold through September, but they advise locking in terms now to avoid any late-year reversal.
This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.