Despite surging house prices during the COVID-19 pandemic, it's still cheaper to buy than rent in large areas of regional NSW, Victoria and Tasmania, although it's a different story in population hubs like Newcastle, Wollongong, Ballarat and Bendigo. At a national level, servicing a mortgage is cheaper than paying rent on 36.2 per cent of Australian properties, an increase on the 33.9 per cent recorded in February 2020 according to CoreLogic's latest Property Pulse update. That figure jumps to 89.1 per cent of properties in the Far West and Orana region, which includes the cities of Broken Hill and Dubbo. It's a similar story in the New England and North West, which includes Tamworth, Moree and Armidale, with 87.4 per cent of properties more affordable to buy than rent. In Victoria, it makes more sense to buy in the North West (87.1 per cent of properties) and Shepparton regions (78.7 per cent). It's still cheaper to buy than rent in some coastal areas, although the proportion of properties that are cheaper to buyer is lower than other regions. For example, in the Warrnambool and South West regions 63.5 per cent of properties are cheaper to buy and in the Latrobe and Gippsland region the number is even lower, at 52 per cent. 82.8 per cent of properties in Tasmania's West and North West region are cheaper to buy than rent and in Launceston and the North East it's 72.4 per cent. The analysis assumes a 20 per cent deposit and interest rates of 2.4 per cent. The calculations are based on each property CoreLogic has a price and rental valuation for. Regions are grouped according to the SA4 regions used by the Australian Bureau of Statistics. Report author Eliza Owen, CoreLogic head of research, said that the general increase in the proportion of properties that are cheaper to buy was the result of cheaper lending conditions. "The increase in areas where it is cheaper to service a mortgage than to pay rent across Australia, when compared with pre-Covid analysis, is a reflection of much lower interest costs on mortgage debt since the onset of [the pandemic]. Average new mortgage rates for owner occupiers have fallen from 3.21 per cent in February 2020, to 2.4 per cent as of May 2021, according to RBA data," she wrote. Despite this increase at a national level, CoreLogic research director Tim Lawless said that rising regional house prices had likely reduced the number of properties in regional areas where it's cheaper to buy than rent. "Although this analysis doesn't have a historical series to refer back to, considering the surge in housing values across regional areas of NSW and Victoria, we have probably seen some slippage in the proportion of suburbs where it's cheaper to service a mortgage than to rent," he said. "Since the most recent cut to the RBA's cash rate in November last year, housing values across regional NSW have risen by 18.0 per cent and are up 16.5 cent across regional Victoria. In dollar value terms, this equates to a rise of roughly $90,000 and $69,000 respectively," he added. Even taking account of growing house prices, regional areas were still far more affordable than capital cities. "Although the proportion of suburbs where it's cheaper to buy than rent may have tapered through 2021, its clear the regional markets have a far larger proportion of properties where the cost of a mortgage is less than the cost of renting. 48.2 per cent of properties across regional NSW are more affordable to pay down a mortgage than rent, compared with only 4.9 per cent across Sydney. "Similarly, across regional Vic, 43.6 per cent of suburbs have a cost associated with servicing a mortgage than renting, compared with only 7.3 per cent in Melbourne." Different story in major hubs CoreLogic's analysis found that far fewer properties in the major regional hubs of NSW and Victoria are cheaper to buy than rent. In Bendigo 42.4 per cent of properties are cheaper to buy, with the majority cheaper to rent. In Ballarat it's 29.3 per cent. In Newcastle and Lake Macquarie just 27.5 per cent of properties are cheaper to buy. In the Illawarra it's even lower, at 18.5 per cent. "There is a significant level of diversity in the rent vs buy dynamic across the sub-regions of both states," Mr Lawless said. "The lower proportion of properties where it's cheaper to service a mortgage than rent reflects a different balance between housing values and rental rates in these areas. At the other end of the spectrum, the more rural locations of each state have a much higher proportion of properties where paying a mortgage is less costly than paying rent."