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§ 08 — Property

Should you rent or buy?

At current Sydney median prices (~$1.1M) and a 6.5% mortgage rate, the break-even point where buying becomes cheaper than renting is approximately 9–12 years, assuming 4% annual capital growth and 3% rental yield.

Buying builds equity and captures capital growth, but ties up a large deposit and costs more to run each month. This calculator compares the net wealth outcome of both paths — accounting for stamp duty, mortgage repayments, maintenance, rent inflation, and the return a renter earns on their invested deposit.

Updated · Apr 2026·Source: ATO · State revenue offices

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Renting

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Applied to renter's invested deposit

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The result

Enter your details and click Compare to see net worth projections, the break-even year, and whether buying or renting comes out ahead over your chosen timeframe.

When does buying beat renting in Australia?

Buying a home ties up a large deposit, costs stamp duty upfront, and runs higher ongoing expenses than renting. The question isn't whether buying ever wins — it usually does eventually — but how long it takes to recoup those upfront costs.

Stamp duty alone on a $750,000 property can run $28,000–$40,000 depending on your state and whether you qualify for first-home-buyer concessions. Add conveyancing, inspection fees, and LMI if your deposit is under 20%, and you often need 7–12 years of capital growth just to break even against a renter who invested the same funds in a diversified share portfolio.

The two biggest levers are property growth rate and how long you plan to stay. In cities where property grows at 6–7% annually and rents rise in lockstep, buying can pull ahead in as little as 7 years. In flat markets, the break-even can stretch past 20 years — by which point a renter investing the difference has built comparable wealth.

State differences, ongoing costs, and common mistakes

The rent vs buy debate is heavily influenced by which state you live in. Queensland has the most favourable stamp duty for first home buyers — eligible buyers pay nothing on properties up to $700,000 — which brings the break-even year substantially forward compared with NSW or Victoria.

Victoriahas some of the highest stamp duty in the country. On a $900,000 Melbourne property, stamp duty alone exceeds $49,000. First home buyers in VIC are exempt up to $600,000 and receive a concession up to $750,000 — but most properties in Melbourne's inner and middle rings sit above that. The first-home buyer grant of $10,000 for new builds provides partial relief.

Ongoing ownership costs are frequently underestimated. Beyond mortgage repayments, owners pay council rates (~$1,500–2,500/year), water rates, building and contents insurance, and maintenance — budgeting 1% of property value annually is a common rule of thumb, meaning $8,000–10,000 per year on a $900,000 home. Strata apartments add body corporate fees on top, often $3,000–10,000 per year in major cities.

The common mistake is comparing a mortgage repayment against rent without accounting for these extra costs, or using nominal property growth without deducting the opportunity cost of the deposit and additional expenses. This calculator models both paths on a level playing field — the renter invests the deposit and the annual saving in a diversified portfolio, and the outcome is compared year by year.

First home buyers in Australia: grants, schemes, and the real cost of getting in

For first home buyers, the rent vs buy decision in 2026 is shaped as much by government assistance schemes as by the underlying economics. Understanding what is available — and what the eligibility conditions mean in practice — is essential before committing to either path.

The First Home Guarantee (FHBG)allows eligible buyers to purchase with as little as a 5% deposit without paying Lender's Mortgage Insurance (LMI). The federal government guarantees the remaining portion of the 20% deposit notionally, removing the LMI cost that would otherwise add $10,000–$30,000 to your purchase. The scheme has 35,000 places per year and is restricted to owner-occupiers purchasing below the property price cap in their state — $900,000 in NSW and VIC, $700,000 in QLD and WA, $600,000 in SA. The catch: a 5% deposit on a $900,000 Sydney property is $45,000 — still a formidable savings target for most first-time buyers.

Stamp duty concessions for first home buyersvary dramatically by state and are frequently the largest dollar benefit available. NSW exempts first home buyers from stamp duty on properties up to $800,000 (saving up to ~$31,000) and provides a concession up to $1,000,000. Victoria's exemption threshold is $600,000 for established homes and $750,000 for new builds. Queensland and Western Australia offer concessional rates for first home buyers that can reduce or eliminate stamp duty on properties within their respective thresholds. These concessions can bring the break-even year forward by 3–5 years in the rent vs buy model.

The First Home Super Saver Scheme (FHSS) allows eligible individuals to make voluntary contributions to their superannuation fund and withdraw up to $50,000 ($100,000 for couples) to use as a home deposit. Contributions are taxed at 15% (rather than your marginal rate), and withdrawals are taxed at your marginal rate minus a 30% offset. For someone on a 32% marginal rate, the effective tax saving on contributions is around 17 cents per dollar — a useful boost to deposit-building, though the mechanics require planning at least 12 months ahead of your intended purchase.

The rent affordability crisis has changed the calculus. In Sydney, Melbourne, Brisbane, and Perth, median rents rose 20–40% between 2021 and 2024. For prospective buyers, higher rents reduce the cash flow advantage of renting and make the deposit-saving period longer — a compounding problem. At the same time, higher property prices have pushed mortgage repayments on a median-priced home well above the equivalent rent in most capital cities. In Sydney, a 20% deposit on a $1.3 million median house in 2026 requires $260,000 in savings before transaction costs — a figure that takes the average income earner 8–12 years to accumulate without family assistance.

Regional markets offer a different equation. Outside the capital cities, property prices remain far more accessible — median house prices in many regional Queensland, WA, and SA towns sit below $500,000. For buyers willing to relocate or work remotely, the rent vs buy break-even can arrive in as little as 3–5 years in affordable regional markets with strong local growth drivers (mining, agriculture, tourism). The trade-off is reduced labour market flexibility and potentially higher rental yields but lower capital growth over the long term.

Sources

  • Reserve Bank of Australia — cash rate and mortgage rate data
  • Australian Taxation Office — negative gearing and CGT rules
  • PropTrack / Domain — median dwelling price estimates, June 2026
  • Data last verified: June 2026

Rent vs buy Australia — frequently asked questions

Is it better to rent or buy a house in Australia in 2026?+ open

It depends on your state, property price, deposit size, and how long you plan to stay. Buying typically builds more wealth over the long term through equity and capital gains, but renting can be ahead in the short term because stamp duty, higher repayments, and maintenance take years to recoup. Use the calculator to find your break-even year for your specific situation.

How long does it take for buying to beat renting in Australia?+ open

For a typical Australian capital city property at current prices and mortgage rates, buying tends to pull ahead in net worth terms between year 7 and year 15. The break-even is shorter when property growth is high, your deposit is large, and rents are rising quickly. In flat or slow-growth markets, renting and investing the difference can build comparable wealth over 20+ years.

What upfront costs do I need to budget for when buying a home in Australia?+ open

The main upfront costs are: deposit (typically 10–20%), stamp duty (varies by state — roughly $15,000–$55,000 on a $750,000 home), conveyancing ($1,000–$2,500), and building and pest inspection ($500–$700). Total upfront costs beyond the deposit commonly run $20,000–$60,000. First home buyers may qualify for stamp duty concessions or exemptions depending on the state.

Does a larger deposit make buying better than renting?+ open

Yes — a larger deposit reduces your loan amount and monthly repayments, lowering the ongoing cost advantage of renting and bringing the break-even year forward. A 20% deposit also avoids Lender's Mortgage Insurance (LMI), which can add $10,000–$30,000 to your purchase cost. However, a larger deposit also means more capital committed to property that could otherwise be invested in a diversified share portfolio.

What investment return should I assume for the renter in a rent vs buy comparison?+ open

The ASX 200 has historically returned around 7–10% per year including dividends, before tax. A conservative assumption of 7% per year (diversified shares) is commonly used. The calculator lets you adjust both the investment return and the property growth rate to test different scenarios. Small differences in these assumptions have an outsized effect on the break-even year — which is why sensitivity-testing matters.

Should I buy now or wait for property prices to fall?+ open

Timing the property market is notoriously difficult. Australian capital city median prices have fallen at various points — notably 2017–2019 in Sydney and Melbourne — but have rebounded strongly each time. The more useful question is whether you can afford the repayments comfortably at current rates, whether you plan to stay at least 7–10 years, and whether your deposit covers 20% (to avoid LMI). If all three are yes, the timing risk is much lower than it feels.

How does stamp duty differ between states for a $750,000 home?+ open

Stamp duty on a $750,000 property varies significantly: NSW ~$28,700, VIC ~$40,070, QLD ~$15,925 (eligible first home buyer: $0), SA ~$33,330, WA ~$27,765. First-home-buyer concessions reduce or eliminate stamp duty in most states up to a property price threshold. Use the stamp duty calculator to get the exact figure for your state and buyer type.

What ongoing costs should I include when comparing renting and buying?+ open

Owners face costs beyond the mortgage: council rates (~$1,500–2,500/yr), water rates, strata fees if applicable (~$2,000–8,000/yr for apartments), building insurance (~$1,200–2,000/yr), and maintenance (budget 1% of property value per year on average). These typically add $5,000–15,000 per year on top of mortgage repayments — costs that renters don't incur. The calculator includes an ongoing cost input to account for this.

Run the numbers on the full purchase

§ 03 — Property

Stamp duty calculator — all states 2026

See exactly how much stamp duty you'll pay in NSW, VIC, QLD, WA, SA, ACT, TAS, or NT — plus first home buyer concessions.

§ 02 — Loan

Australian mortgage repayment calculator

Calculate your monthly repayments at any loan amount and interest rate — see the interest vs principal split over time.

§ 07 — Property

Negative gearing tax saving calculator

If you're buying an investment property rather than a home, model the tax deductions and after-tax holding cost.