• Is it better to rent or buy property in Australia?

    You can do your sums, you can weigh up the pros and cons, but working out whether it is better to buy or rent is an emotional decision. RAMS explains.

  • You can do your sums, you can weigh up the pros and cons, but at the end of the day, working out whether it is better to buy or rent is an emotional decision. 

    Australia is a nation of homeowners. According to the Australian Bureau of Statistics, around 70% of us o wn the place where we live – in partnership with the bank, generally.

    So it seems the 'great Aussie dream' of owning a quarter-acre block and sticking a house on it that emerged in the 1950s is still reasonably alive and well.

    Chances are though, if you're reading this, you're in the remaining 30 per cent but thinking about taking out a home loan and buying a house. 

    The data is out there

    And chances are also that you're in your early 30s, there are (on average) 2.5 of you living in your house (and isn't it amazing how much mess half a person can make?!), two-thirds of you are part of a couple, one in three of you have children and one in five of you are single.

    What the stats don't reveal, of course, are the motivations that make people want to buy a home. This is likely to be the biggest single thing you ever buy, so you've got to make sure it's right for you. 

    A place to call ‘home’

    This is – hopefully – the place where your family will grow up, where your kids will take their first steps (and quite possibly throw their first teenage party while you're away on a much-needed mini-break). Which means buying a home is ultimately an emotional decision.

    But that doesn't mean there aren't practical considerations to keep in mind. So let's have a look at some of the differences of  the rent a house or buy a house debate …

    Cash flow

    Although rent money is sometimes called 'dead money', renting generally frees up your cash flow. In addition to mortgage payments, a homeowner needs money for rates, bills, repairs, general maintenance and costs. For the renter, by contrast, you pay your rent, your utility bills – and that's about it.


    Renting offers greater flexibility. If you want to move (for work, or to a bigger/smaller property), it is relatively easy to do so. 

    For the homeowner, needing to advertise the property, pay agent's fees and stamp duty, find a new place, potentially secure a bridging loan and all the stress that goes along with that can make it seem like more trouble than it's worth.


    When  renting, you never know how long you can stay in the one property. Long-term leases are hard to come by and the owner may want to sell or the rent may jump dramatically, meaning you could be on the move every year or so.


    Although your future mortgage repayments may be more than you are currently spending on rent (use our affordability calculator to get an idea of the difference), the value of your home should increase over time, offsetting the amount you will have paid in interest over the years and, hopefully, seeing you turn a profit when you do decide to sell.

    It’s your call

    Ultimately, the choice of whether or not to own a home is a very personal – and very emotional – one. It is, of course, important to seek professional financial advice before making such a big decision to make sure you understand such issues as interest rate comparisons, but you will still be left needing to make the choice that is right for you. 

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  • Disclaimer:

    While such material is published with permission, RAMS is not responsible for its accuracy or completeness.  This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.