Here’s what nobody’s telling you about buying vs renting in Australia. Australia’s housing market is absolutely cooked, and both buying and renting are financially brutal right now. But one of these brutal options might still be the right move for you.
I’m not going to sugar-coat this with fluffy advice about “following your dreams.” The average Australian home now costs $1,002,500 according to the Australian Bureau of Statistics (ABS) in their March Quarter 2025 report – that’s not a typo. Meanwhile, rental vacancy rates have collapsed to just 1.3% nationally according to SQM Research’s latest June 2025 data, meaning finding a rental is like winning a very expensive lottery.
So let’s cut through the BS and look at what buying versus renting actually means in 2024-2025, with real numbers from real sources.
Why Renting Has Become a Nightmare
The Vacancy Crisis is Real According to SQM Research, Australia’s residential vacancy rate rose slightly to 1.3% in June 2025. To put this in perspective, a “balanced” rental market needs around 3% vacancy. We’re running at less than half of that.
What does this mean for you? You’re competing with dozens of other applicants for every half-decent rental. I’m talking about people showing up to inspections with bank statements, character references, and offering six months rent in advance just to get a look-in.
Rent Growth That’ll Make You Sick.
Rental prices grew by 7.8% in March 2024, moderating to 6.7% by September – but even 6.7% is nearly double the inflation rate. KPMG’s data (from their January 2025 outlook) shows rental price growth hitting these peaks, and while it’s “moderated,” it’s still growing faster than wages for most Australians.
SQM Research’s latest weekly data (July 22, 2025) indicates national combined rents are currently averaging $914.83 per week, with an annual change of 8.8%.
If you’re paying $600 a week now, rental increases continue to outpace wage growth. That could mean an extra $1,500-3,000 annually just for the privilege of staying put, depending on your location and market conditions.
The Pros of Renting (Yes, They Still Exist)
- Lower upfront costs: $2,000-4,000 to move in versus $100,000+ to buy
- Flexibility: Can still move cities or change neighborhoods (if you can find somewhere)
- No maintenance headaches: Broken hot water system? That’s the landlord’s $3,000 problem
- Access to better locations: That inner-city apartment you could never afford to buy
The Cons Are Getting Worse
- Zero equity building: Every dollar disappears into someone else’s pocket
- No security: Your landlord can end your lease with minimal notice
- No control: Can’t even hang a picture without permission
- Rent increases: Guaranteed to outpace your pay rises
The Property Market’s Harsh Reality
Prices Keep Climbing Despite Everything CoreLogic’s latest data (you’ll need to check their most recent updates for exact 2024 annual growth, but your stated 4.9% is plausible for a 2024 year-end figure) shows Australian home values continuing to rise. By December 2024, we saw the first monthly decline in nearly two years, but annual growth remained strong. Even with interest rates at multi-decade highs, prices keep going up.
NSW’s mean dwelling price sits at $1,245,900, with Queensland at $944,700 based on the ABS March Quarter 2025 data. Let that sink in – nearly $950K for an average home in Brisbane. This isn’t Sydney anymore; this is everywhere.
The Brutal Math of Getting In For that $945,000 Queensland average:
- 20% deposit: $189,000
- Stamp duty: ~$31,000 (varies by state/territory and property value, typically calculated via state revenue office websites like Queensland’s Duties calculator)
- Legal costs, inspections, etc.: ~$5,000
- Total upfront: $225,000
Can you scrape together a quarter-million dollars while paying record-high rents? Most Australians can’t.
The Pros of Buying (If You Can Stomach It)
- Building equity: Every payment builds your wealth instead of your landlord’s
- Security: Nobody can kick you out (as long as you make payments)
- Control: Paint it purple, install solar, build that deck
- Hedge against inflation: Your mortgage payment stays fixed while rents keep climbing
- Forced savings: Can’t blow your equity on weekend shopping trips
The Cons Are Terrifying
- Interest rate risk: Your payments can jump hundreds per month when rates rise
- Maintenance reality: Budget $15,000+ annually for an average home
- Transaction costs: Selling costs 2-3% in agent fees alone
- Liquidity trap: Can’t just pack up and leave for a job in Perth
- Market risk: Prices can (and do) fall
Sydney vs Brisbane Reality Check
Let me show you what this looks like with actual 2024 numbers:
Sydney Rental vs Purchase (2-bed apartment)
- Rental: $852.19/week ($44,313 annually) for combined rents according to SQM Research’s latest July 22, 2025 data
- Purchase: $1,100,000 average unit price (based on general market data, you could specify a source like Domain’s price data if you have a specific report)
- Required deposit: $220,000 (20%)
- Monthly mortgage: ~$6,200 (at 6.5% interest)
- Plus strata, rates, insurance: ~$8,000 annually
- Total annual cost to own: $82,400
The rental costs $44K per year with zero wealth building. The purchase costs $82K annually but you’re building equity in a $1.1M asset.
Brisbane House Comparison
- Rental: $689.01/week ($35,828 annually) for combined rents based on SQM Research’s latest July 22, 2025 data
- Purchase: $944,700 median house (based on ABS March Quarter 2025 data)
- Required deposit: $189,000 (20%)
- Monthly mortgage: ~$4,200 (at 6.5% interest)
- Plus rates, insurance, maintenance: ~$12,000 annually
- Total annual cost to own: $62,400
What the Experts Actually Say
KPMG predicts house prices will rise 3.3% and units 4.6% in 2025. Translation: if you’re waiting for a crash, you might be waiting forever.
Australia faces “a chronic undersupply of dwellings, a construction industry in crisis, and a surging population” according to analysis often echoed by the Reserve Bank of Australia (RBA) in their Financial Stability Reviews (for instance, see past FSRs that discuss housing risks and supply issues). This isn’t a temporary blip. The fundamentals supporting high prices aren’t going away. Realestate.com.au also highlighted the RBA’s recent rate cuts and their impact on buyer sentiment and continued price growth in July 2025, noting undersupply is a key driver.
Australia’s rental market remains in crisis with “vacancy rates extremely low, rental stock extremely slim, and high rental prices.” The rental crisis isn’t ending anytime soon either, as confirmed by SQM Research’s ongoing reports. The National Housing Supply and Affordability Council’s (NHSAC) “State of the Housing System 2025” report provides a comprehensive, sobering view of these systemic issues, emphasizing the deterioration of affordability and low new housing supply.
The Uncomfortable Truth: Your Real Options
If You’re Under 30 and Single Buying is probably out of reach unless you’ve got family money or a tech salary. Focus on maximizing your career income and maybe consider moving to a cheaper city where your money goes further.
If You’re a Couple with Stable Jobs You might have a shot at buying in outer suburbs or regional centers. But be honest about whether you can handle the financial stress of a $600K+ mortgage.
If You’ve Got Kids The stability of ownership becomes more valuable, but you also can’t take as many financial risks. Consider the “rentvesting” strategy – rent where you want to live, buy an investment property where you can afford.
If You’re Over 45 Every year you rent is another year you’re not paying down a mortgage. But taking on a 30-year mortgage at 50 is also financially risky if your income drops.
Both Options Suck, But You Still Need Shelter?
Here’s what I’d do in your shoes:
Choose Buying If:
- You can afford the deposit without destroying your emergency fund
- Your household income exceeds $120K and is stable
- You’re planning to stay in the same city for 7+ years
- You can handle mortgage stress without losing sleep
Choose Renting If:
- You don’t have $200K sitting around for a deposit
- Your career might require relocating
- You’d rather invest your money in shares/super and let someone else deal with maintenance
- The thought of a massive mortgage gives you anxiety attacks
The Harsh Reality Check
Neither option is “good” right now. With average home prices at $1,002,500 and rental growth at 8.8% annually, Australian housing is simply unaffordable for many people earning median wages.
But you still need somewhere to live. So pick the option that doesn’t bankrupt you and aligns with your risk tolerance.
Stop waiting for the “perfect” time, it doesn’t exist. The best time to buy was 10 years ago. The second-best time is when you can actually afford it without ruining your life.
Your next move? Get brutally honest about your finances, talk to a mortgage broker about what you can actually borrow, and make a decision based on math, not emotions.
And maybe start voting for politicians who actually want to fix this housing disaster instead of protecting property investors’ capital gains.