The dream of owning a home is alive and well, but for many Australians it’s been pushed further down the road. Over the past decade, the average age of first-home buyers has crept up to around 35, as economic pressures have made it increasingly difficult to save for a deposit.
At the same time, Australia’s housing market continues to shift. In many cities, home prices have surged due to a shortage of supply, while rental markets are also under pressure from limited stock and rising interest rates. It’s no surprise that many renters are questioning whether it’s still realistic – or even wise – to aim for homeownership in today’s climate.
Things to think about
When deciding between renting and buying, the numbers tell an important part of the story. Both options come with their own set of financial commitments and understanding these can help you make an informed choice.
Interest rates and home loan costs
In recent years, interest rates have risen sharply, increasing the cost of borrowing. For potential buyers, this means higher home loan repayments, which can significantly impact affordability, especially for first-home buyers without a large deposit.
Property prices
Across much of Australia, home values have surged, driven by strong demand and limited housing supply. In some capital cities, prices are outpacing wage growth, making it harder for renters to transition into homeownership. While buying can build long-term equity, the upfront costs such as the deposit, stamp duty and legal fees can all be a major barrier.
Rental market pressures
Renters aren’t necessarily getting a reprieve either. The rental market has tightened, with vacancy rates at historic lows in many regions. As a result, rental prices have jumped significantly. For families or individuals looking for long-term stability, this volatility can be just as concerning as the challenges of buying.
Lifestyle and flexibility
Beyond the financials, your day-to-day life plays a key role in your decision. Renting often offers greater flexibility, which is ideal for those who may move for work, study or lifestyle reasons. Buying, however, offers more stability and the freedom to customise your living space. If you have children or long-term plans in a particular location, owning can offer peace of mind.
The pros of renting vs. buying
Renting
Buying
The cons of renting vs. buying
Renting
Buying
Help with your decision making
If you’re still not sure about whether renting or owning a home is best for you, don’t worry. There are plenty of tools and resources available that can assist you in making a decision.
Sometimes seeing the numbers in black and white can be all the help you need, and there are several options to choose from:
Speaking to an expert can also provide clarity and help you see the best path forward. You may want to discuss your options with a financial advisor or even just someone you know and trust who has experience of renting and buying.
If you decide to buy, our home loan specialists know the first home buying journey like the back of their hand. They can assist with early pre-approval conversations right through until settlement day. Plus, you can choose to meet face-to-face or virtually.
There is plenty of first home buying support available too, including government grants. Check out our dedicated first home buying checklist if you decide that buying a property is what you want to do.
Important information
Banking and Credit products issued by Police & Nurses Limited (P&N Bank).
Any advice does not take into account your objectives, financial situation or needs. Read the relevant terms and conditions, before downloading apps or acquiring any product, in considering and deciding whether it is right for you. The Target Market Determinations (TMDs) are available on our website or upon request.