What’s Better: Renting or Buying a Home in Australia?

March 04, 2026

Is owning a home still the “best investment”?

For many, “owning a home” is a dream that has been passed down from generation to generation.

The reality is, for a number of reasons, home ownership in Australia is considerably more expensive than it used to be, and in most cases, far more expensive than renting. This leaves many people “priced out” of the market and choosing to rent instead.

There is no absolute right or wrong answer in the buying a home vs renting a home debate – because there are upsides and downsides to both options. Like every investment, you need to consider your personal circumstances and what works best for you and/or your family, lifestyle, etc.

Below we’ll bust some of the common “myths” around whether renting is a waste of money, and the cost of renting vs owning to help you have a more complete picture of the pros and cons and what’s best for you.

HOME OWNERSHIP PROS & CONS

There are some more obvious benefits to home ownership, such as:

A higher level of security (e.g. if your make your mortgage payments, you can’t be “kicked out”, unlike when a landlord decides to sell a rental property or move back in).
Potential financial gains like positive gearing (if you manage to gain more from your investment than your outgoings), or negative gearing (e.g. a lower taxable income offset by landlord rental losses).
Freedom to live as you please and decorate however you want, have pets, etc. (although the right rental will allow this too).

In saying that, there are some Home Ownership “Hidden Costs” – the types of home ownership expenses that people tend to overlook or not realise when considering the true cost of buying a house.

1. Fees

Here are some of the common one-off fees payable when purchasing a home:

Solicitor or conveyancer fee to manage the legal transfer of the title.
Fee for any independent due diligence inspections.
Loan application and valuation fees.
Strata inspection report.
Lender’s Mortgage Insurance if borrowing over 80% of the property’s value.

2. Australian Stamp Duty

We all know about the deposit cost, but sometimes people forget about Stamp Duty. This is a Government state tax that’s calculated based on the purchase price of your home and paid upon settlement. In NSW, for a $750,000 property, Stamp Duty would be around $28,000 additional.

3. Land Tax Australia

You may need to pay land tax – an annual tax that homeowners pay based on the total unimproved value of land owned. It typically applies to investment properties, commercial or vacant land.

4. NSW Council Rates

Council rates are commonly paid each year if you own land or a home. The rates are based on the land value determined by the Valuer General (often listed on your notice).
The amount payable can change each year, and may increase by as much as 80% or 90% (often to help fund infrastructure in that area).
Here’s a link to the rates calculator from the City of Sydney, but for the most accurate rate, we suggest checking the specific council’s website (e.g. North Sydney Council).

5. Strata Fees Australia

Strata fees apply to property owners who purchase an apartment, townhouse, condo or unit (rather than a free-standing house).
They are generally an ongoing payment (often payable every 3 months) to cover overall property maintenance costs per year and management of the general property and common areas.
The amount an owner pays depends on a variety of factors, such as the building’s size, age, value, amenities (e.g. elevator, pool, gym), and the cost of regular expenses like cleaning, gardening, etc. Strata fees can on average be between $1,000-3,000+ per quarter.
Special Levies are an expense some owners face on top of strata fees if there is the need for an additional service, such as repainting the building or protecting against damage or deterioration requiring an upgrade or repair, such as a roof repair or building painting.

6. Maintenance

Unlike renting, homeowners must cover the expenses for ongoing maintenance requirements. Some of the main maintenance homeowners face include:
Plumbing issues (e.g. leaks, water pressure issues).
Servicing of air conditioners, dishwashers, ovens, dryers.
Roof and gutter cleaning.
Pest control.
Gardening.
Safety checks (e.g. electrical, roof, smoke detector, etc.).
Maintenance of flooring, walls, ceilings.
Etc.

The above overview is a topline look that sums up main costs of owning a house in Australia, but what about renters in today’s market? What are the financial benefits of renting?

RENTING / TENANT PROS & CONS

1. Freedom and Mobility

If you are someone who loves to travel and live in different areas, or you need to move around a lot for your study or job, renting provides ideal freedom to experience living in a range of different places and postcodes.
That’s not to say you can’t also own a home and rent it out, but it will likely be far less beneficial for you to buy and live in a house if your lifestyle requires the flexibility of renting.

2. Invest Wisely

In Australia buying a home can be treated as if it’s the best investment possible and the ultimate goal. Objectivity, it is not the “best” for everyone, and there are many other investment options that could drive higher long-term returns.
You need to decide are you looking for capital growth, tax benefits, short or long term returns – or a mix of these.
From shares and EFTs to bonds and term deposits – we highly recommend speaking with a Financial Advisor to know if investing hundreds of thousands of dollars into buying a home is the best choice for you.
Remember, you can still build significant wealth while renting, and you’ll have more “liquidity” since you won’t have as much tied up in your home ownership expenses, yearly property maintenance costs and mortgage.

3. Less Ongoing Fees

Whether your rental property is old, new, or somewhere in between, the landlord and agent have a responsibility to prioritise reasonable requests – e.g. repairs, safety, security and liveability requirements. This might be fixing a latch on a gate, or a leaky tap, or it could be more substantial.
When you’re the tenant, you just need to make sure you pick a good agent (and landlord) who has your back and respects your rights, like arriva.

4. Mortgage vs. Rent Payment

A large factor of your mortgage repayment depends on how much you paid in your deposit/how much your loan is.
Increasing interest rates can lead to higher mortgage repayments and overall financial stability. When you rent, that’s the highest price you’ll pay during your fixed lease agreement (rent can only be increased once per year in NSW). When you’re paying a mortgage, your repayments will fluctuate, especially on variable-rate loans. Renting during periods of high interest rates can indeed save you money and is one of the benefits of renting long term.
For most, mortgage loan repayments outpace the price of rent. You might need to be $5,000 a month for a mortgage, but $2,900 a month renting. The choice comes down to what makes most financial sense for you and your budget.

5. Traditional Renting vs. Build to Rent in Australia

Standard traditional rental models can be very inflexible for tenants. Once a fixed term has ended, a landlord only needs to provide 30 days-vacate notice to a tenant if they want to sell the premises. This can feel like a short and stressful period to find new accommodation.
Build to Rent (aka: BTR) is a more modern type of ownership by developers rather than individual landlords. BTR is designed for long-term secure rental living that is tenant experience focused, rather than centred around individual sale.
arriva is an example of Build to Rent properties that offer:
Stable tenure and rental benefits.
Professionally managed apartments via a friendly on-site team.
High quality amenities.
Pet-friendly rentals.
The ability to personalise apartments and make them feel like home.
A sense of community and care, rather than a quick cash grab.

What’s the Verdict?

The questions of “is it better to rent or buy in Australia” is ultimately a personal choice, since both come with a different set of risks vs rewards, and different costs and savings. A good way to determine what’s right for you is to talk to a trusted Financial Advisor and understand your position and opportunities better.

Ultimately, if you don’t want to deal with ongoing maintenance, love to have things taken care of around your home and enjoy safety and security (that doesn’t mean compromising on freedom and flexibility) the renting could be a great option for you and enable you to build wealth in a range of ways.

Find your perfect rental at arriva today.