Aspiring homeowners now have a clear edge in almost one in four suburbs across Australia, with new data showing it’s cheaper to buy than rent a unit than rent one.
According to Domain, unit prices in a record-high 22.8% of suburbs are lower than their respective median rents. This figure signals a rare shift in housing affordability that is creating new opportunities for renters ready to make the leap into ownership, particularly in city-unit markets where rental pressure remains high.
While the proportion of suburbs where it is cheaper to buy than rent a unit is higher across the combined regionals (31.3%), buyers can also find such opportunities in 20.7% of capital city locations.
Perth renters currently have the biggest advantage, with 82.9% of suburbs offering unit ownership at a cheaper cost than renting. Melbourne (19.7%) and Adelaide (13.3%) follow, albeit with significantly lower proportions.
House buyers, however, are not as fortunate; only 6.0% of Australian suburbs are currently offering lower mortgage repayments than rent. Those looking to purchase in regional locations, though, will have a slightly better chance, with 14.0% of suburbs open for consideration. This is a stark contrast to 1.4% of capital city locations.
While the dream of home ownership feels increasingly hard in the country’s biggest cities, Domain national property editor Alice Stolz said the data proved there were still pockets of opportunity, especially for first home buyers in Australia open to units or regional locations.
“With further interest rate cuts expected and more support for first home buyers in Australia, would-be buyers should be doing a pulse check of their financial situation and the areas they’re looking to buy. For some, owning a home could already be cheaper than renting – if you know where to look.”
Rental prices have surged over recent years and remain a major pressure point for households. Although Cotality data reveals that rents rose 3.4% annually in the June quarter – the lowest growth rate since early-2021 – the five-year increase has been a significant 42.7%, pushing the median weekly rental value almost $200 higher to $665 per week.
By comparison, wage growth was only 15.8% in the five years to March 2025, according to the Australian Bureau of Statistics.
Cotality economist Kaytlin Ezzy said the disproportionate increases in rents and wages had seen the portion of pre-tax income directed to rental payments rise from around 26% in June 2020 to just under 33% in December 2024.
While house prices have rebounded in most capital cities, unit values haven’t climbed as steeply. According to Domain’s latest House Price Report, the respective annual price growth across the combined capitals in July was 5.1% and 4.5%. Unit values across the combined regionals also rose at a lower 7.3% compared to 8.2% for houses.
For renters feeling the strain of rising costs and limited rental stock, the current shift in affordability could be a signal to reassess their next move. Although buying won’t be the right decision for everyone, there are some reasons why it may be worth considering sooner rather than later.
The Reserve Bank of Australia has cut the cash rate twice this year, and markets suggest there may be further easing in 2025 if inflation continues to decline.
For buyers, lower interest rates mean lower monthly repayments and improved borrowing capacity. Those in a strong financial position may find that their buying power has already increased, and getting into the market before competition picks up could offer an advantage.
Despite a slowdown in rent growth, vacancy rates remain near historic lows. National rental listings are still well below the five-year average, making it harder for tenants to find secure, affordable housing.
Over the four weeks to June 29, Cotality observed around 100,000 rental listings nationally, roughly 23% below the previous five-year average – or around 29,000 fewer listings than is usually seen that time of year.
Ms Ezzy said: “The shortfall in rental listings has seen the national vacancy rate slip to 1.6% in June, only slightly above the record lows seen in early 2024 (1.5%), and less than half the pre-Covid decade average of 3.3%.”
This pressure is pushing more people to consider homeownership as a way to take control of their living situations. While buying comes with upfront costs, the ability to avoid rent hikes and lease uncertainty can be worth it – especially when mortgage repayments are now lower than rent in some suburbs.
Renters are often limited by short-term leases, rising rents and a lack of security. Owning a home offers greater control over your finances and living environment. For those planning to stay in the same location or build wealth over time, the stability of ownership can be a major advantage.
And with unit prices still offering lower entry points in many areas, the long-term benefits of buying vs renting may now be within reach for more people than expected.
Rent payments go straight to the landlord, but every mortgage repayment helps you build equity in your own home. That equity can become a powerful asset, giving you more financial options in the future, such as funding renovations, upgrading to a larger property, or investing in a second home. The sooner you buy, the sooner you can start turning your repayments into long-term value.
While there are several clear benefits of buying vs renting, it is important that you factor in more than just the deposit when planning to buy. Other upfront costs may include stamp duty and, if you’re borrowing more than 80% of the property’s value, lender’s mortgage insurance.
You’ll also need to account for ongoing expenses like maintenance, council rates, strata fees (for apartments) and home insurance. Being prepared for these costs can make your transition from renting to owning much smoother.
Thinking about stepping out of the rental cycle? Speak to the expert team at Shore Financial. We’ll help you assess your borrowing power, compare the right loan options, and get financially prepared to take advantage of the suburbs where buying may already be the better move. Call us on 1300 416 700, email info@shorefinancial.com.au or fill in this online form.
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