Affordability window opens as market conditions shift in favour of buyers
The cost of renting across Australia has surged in recent years, prompting some financial experts to suggest it may be time for renters to reconsider ownership, with new research from Ubank and Cotality pointing to a narrowing affordability gap between weekly rents and mortgage repayments.
Cotality’s analysis shows that national median rent has climbed 39% over five years, now averaging $659 per week. In comparison, the typical weekly mortgage repayment sits at $922. While buying still costs more in most cases, the gap is smaller than it has been in years.
Notably, in 7.7% of suburbs across the country, mortgage payments are already lower than local rents – assuming a 20% deposit. In nearly 20% of areas, the mortgage is within $100 of the rent.
Darwin stands out, with over 85% of its suburbs offering lower mortgage costs than rent. In other capitals, opportunities are more limited, though still present – 2.6% of suburbs in Perth, 2.3% in Melbourne, and 2% in Canberra fall into this category. In Sydney, Brisbane, and Adelaide, less than 1% of suburbs meet that threshold.
Using median rent payments as a guide, renters could potentially afford homes in a range of markets. The national median rent of $659 a week equates to a mortgage on a $590,000 home.
In Sydney, where rent averages $787 per week, that supports a $704,000 purchase – comparable to units in Canterbury or houses in San Remo. Melbourne’s median rent of $610 aligns with a $546,000 property – similar to units in Narre Warren or houses in Melton South. Brisbane renters paying $678 weekly could afford around $606,000, matching prices in Zillmere or Leichhardt. In Perth, a $713 weekly rent could cover a $638,000 mortgage — similar to buying in Jolimont or Maddington.
Also, mortgage repayments could drop further if interest rates are cut, as some economists anticipate. If the cash rate falls to 3.1%, average weekly repayments could decrease to $856, even if property values rise by another 5%. This shift could make buying more financially viable for many renters, particularly those with stable incomes and savings for a deposit.
For those not ready to give up the convenience of inner-city living, Ubank and Cotality said rentvesting may remain a practical route to home ownership.
“Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,” said Eliza Owen (pictured right), head researcher at Cotality. “Rentvesting can offer the best of both worlds. It’s important to crunch the numbers and understand what your rent could buy and work from there.”
Australian Bureau of Statistics data shows 8,283 first-time buyers took out investor loans in 2024, up 12% year-on-year. Over the past five years, these types of loans have accounted for about 6% of all first home buyer activity.
Younger buyers are leading this shift. Ubank-commissioned research found that 10% of Australians aged 18 to 35 are open to rentvesting – higher than any other age group. Fewer than 20% of those aged 26 to 35 were willing to move further from cities, jobs or family.
“Rentvesting offers the freedom to live where you desire and the potential for financial growth,” said Ray Jokhan (pictured above left), chief home lending officer at Ubank. “It comes with some trade-offs… but we’ve certainly seen it work as a great option for many of our customers.”
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