The Australian suburbs where it's cheaper to service a mortgage than rent

West Australian

28-05-2025

It is more affordable for young Aussies to service mortgage payments than rent in more than 1000 house and unit markets nationwide, new research has revealed.
With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found.
In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent.
The research found there were 495 house markets and 597 unit markets where this was the case.
This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location.
'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said.
'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers.
'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle.
'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.'
A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000.
The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo.
In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South.
Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt.
Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington.
A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found.
Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year.
'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'