Rent vs buy in Australia: how to actually decide

"Rent money is dead money" is the line everyone grows up with — but it's not that simple. Buying has its own big costs that don't build any equity either. The real comparison isn't rent vs mortgage; it's your total net worth in each scenario after a number of years.

The costs people forget on the buying side

• Upfront: stamp duty, legal and inspection fees — often 4–6% of the price, gone the day you buy.
• Ongoing: council rates, insurance, maintenance and (for units) strata — commonly around 1% of the property's value every year, none of which builds equity.
• Interest: in the early years of a mortgage, most of your repayment is interest, not principal.
• Selling: agent commission and legals when you eventually sell.

The cost people forget on the renting side

The renter's hidden advantage is the deposit they didn't spend. A buyer sinks (say) $140,000 plus costs into a house; a renter can invest that money instead, plus any month where renting is cheaper than owning. Over years, invested and compounding, that pot is real wealth — and it's the thing a naïve "rent is dead money" comparison ignores.

The number that flips the answer

Two levers decide it: how long you'll stay, and growth vs returns. Buying needs time to earn back those big upfront costs — sell after 2–3 years and you often come out behind. Stay 10+ years and rising property value plus a shrinking loan usually pull ahead. And if you assume house prices grow faster than your investments would, buying wins sooner; flip that assumption and renting-and-investing can win.

What the numbers can't price

Owning brings security and the freedom to renovate; renting brings flexibility and no maintenance bills or interest-rate stress. The financial comparison is only half the decision — but it's the half most people guess at instead of working out.

Related: first home buyer schemes · offset vs redraw. General information only, not financial advice.