Question 1

Is it better to rent or buy in Australia right now?

Accepted Answer

Whether to rent or buy depends on your time horizon, the local property market, interest rates, and how long you plan to stay. Generally, buying becomes more financially beneficial after 5–10 years in most Australian markets, once transaction costs (stamp duty, legal fees) are offset by property growth and equity accumulation. Use our calculator to model your specific situation.

Question 2

How long do you need to own a home before buying makes sense?

Accepted Answer

The typical break-even point in Australian capital cities is 5–10 years, depending on property growth rates, mortgage rates, and whether you invest the savings from renting. If you plan to move within 3–5 years, renting is often more cost-effective due to high transaction costs like stamp duty.

Question 3

What upfront costs are involved in buying a home in NSW?

Accepted Answer

In NSW, buying a home involves stamp duty (typically 3–5% of the purchase price for a $700k–$1.1M home), conveyancing fees ($1,500–$3,000), building and pest inspection ($400–$700), loan establishment fees, and potentially lenders mortgage insurance (LMI) if your deposit is below 20%.

Question 4

How does property growth affect the rent vs buy decision?

Accepted Answer

Property capital growth is a major factor in the rent vs buy equation. Historical Australian capital city property growth has averaged around 6–8% per annum over the long term. Higher property growth strongly favours buying, as it builds equity quickly. However, if investment returns on alternative assets exceed property growth, renting and investing the difference can be competitive.

Question 5

What is the opportunity cost of a house deposit?

Accepted Answer

The opportunity cost is what you forgo by locking capital into a house deposit instead of investing it. If your deposit is $150,000 and you could earn 7% per annum in a diversified share portfolio, you're potentially foregoing $10,500 per year in returns. This opportunity cost must be weighed against the equity and growth benefits of homeownership.

02 8974 1452

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02 8974 1452

Level 35, Tower One

8:30am – 5:00pm

Rent vs Buy Calculator