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The Australian Suburbs Offering Cheaper Mortgages Than Rent

The Australian Suburbs Offering Cheaper Mortgages Than Rent

The Australian Suburbs Offering Cheaper Mortgages Than Rent?w=400
New research highlights that young Australians might find it more economical to service a mortgage than pay rent in over a thousand housing and unit markets across the nation.
Conducted by Ubank, the study reveals a significant disparity, as rent prices have skyrocketed 39% over five years, reaching a median of $659 weekly, compared to a median mortgage repayment of $922.

In nearly 20% of Australian suburbs, median mortgage repayments are within $100 of median rent costs, with 7.7% of suburbs noting cheaper mortgage payments than rent. This trend is evident in 495 house markets and 597 unit markets nationwide.

The changing landscape has spurred a rise in "rentvesting," a strategy where potential homeowners rent for lifestyle convenience while buying investment properties in more affordable areas. This approach has gained traction, particularly among younger buyers, as it allows them to live where they choose and offset ownership expenses by renting out their purchased property.

For those paying a median rent of $659 weekly, it equates to a mortgage on a property roughly valued at $590,000. In Sydney, this could translate to a $787 weekly rent paying for a $704,000 property, either a unit in Canterbury or a house in San Remo. Melbourne's median rent of $610 weekly aligns with a $546,000 property, a unit in Narre Warren or a house in Melton South. Meanwhile, Brisbane and Perth rentals equate to property purchases of $606,000 and $638,000 respectively, offering options like a unit in Zillmere or a house in Leichardt, and in Perth, a unit in Jolimont or a house in Maddington.

The rise in rent prices alongside potential interest rate cuts could make homeownership more attainable, as pointed out by Cotality's head researcher, Eliza Owen. This financial scenario fuels the rentvesting trend, enabling first-time buyers who want to reside in preferable areas while investing in more budget-friendly markets.

Published:Wednesday, 28th May 2025
Source: Paige Estritori

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A situation where a taxpayer is allowed to delay paying taxes on income until a future date, commonly seen in retirement accounts.