In 2024, the age-old question of whether to rent or buy a home in Australia continues to simmer, fueled by fluctuating market conditions, economic uncertainties, and shifting demographics.

Both buyers and renters face significant hurdles at the moment. For renters, there is a national rental vacancy rate of around 1% and Australian rents increasing by an incredible almost 30% since the COVID pandemic. Buyers, on the other hand, have seen interest rates increase by a total four percentage point.

Let’s take a closer look at the cost of buying and renting in Australian cities, strategies for managing housing costs and how a Mates Rates Mortgage cash back offer can help reduce the cost of purchasing a home.

One-third of properties nationally are now cheaper to buy than rent

For many decades, renting has been considered the more affordable option. In fact, as recently as just over 12 months ago, it was still cheaper to rent than buy a house in 90% of Australian suburbs.

How quickly things can change! The increases in interest rates have affected renters as well as home buyers too, causing massive rent increases around the country in the past year, especially in our capital cities.

By the end of 2023, it was revealed that when comparing the forecast cost of renting a property for 10 years versus purchasing one with a 20 per cent deposit (adding in stamp duty and rates), up to one-third of all renters would now be financially better off buying the apartment or unit that they live in many major capital cities.

Gold Coast is now the most expensive city in Australia to rent

Would you believe that it’s now more expensive to rent in the Gold Coast than it is in any other city in Australia!

And new figures, released in Domain’s latest Rent Report, showed that across the capital cities, the cost of renting a house has gone up by 10.5 per cent in the past year to reach a record median rental of $630 a week.

In fact, it is now more expensive to rent in certain Gold Coast and Perth suburbs than it is in some of Sydney’s famed beachfront neighbourhoods and Melbourne’s most prestigious neighbourhoods.

As Gold Coast house rents reach a record high of $845 per week, that’s a median weekly rise of $45 (or 5.6 per cent) over the March quarter, almost $100 more than the average Sydneysider pays and $225 more than Brisbanites.

Rental Increases Across Australia’s Capital Cities

Massive increases in rental prices are not only occurring in the Gold Coast.

Australia’s major cities have consistently ranked among the world’s most expensive in terms of housing costs. In 2024, the rental market remains particularly challenging, with tenants grappling with soaring rents and limited availability.

According to the latest Domain Rent Report, across Australia’s capital cities the cost of renting a house has gone up by 10.5 % in the past year to reach a record median rental of $630 a week and the cost of renting a unit has gone up by 12.7 % in the past year to reach a record median rental of $620 a week.

Median weekly asking rents for units

Median weekly asking rents for houses

Navigating these rental markets requires careful planning and consideration, particularly for individuals and families facing budget constraints or seeking long-term stability. And many renters, buying may well now be the more affordable option!

Is it Time to Switch from Renting to Buying?

Unfortunately in the current economic climate, there is not a lot you can do to make renting more affordable unless you’re okay with taking in a flatmate, looking for a second job, moving back in with Mum and Dad, moving to the country or surviving for years on two minute noodles!

Although renting provides flexibility and avoids the long-term commitment of homeownership, now may well be the time to consider buying instead of renting.

For renters facing steep prices in Australia’s major cities, home ownership is a strategy that not only provides both housing security and a means of building equity, but in the current economic climate, it is increasingly becoming the more affordable option for Australians living in capital cities.

While it can often be more cost effective for you to choose to rent in a location where you like to live but are unable to afford to purchase, rather than rent anywhere you can get, you should always still manage your budget carefully and invest as much surplus cash as you can.

Then you can decide whether to purchase an investment property in a cheaper area where you can afford or invest that spare cash into a number of ultra-low-cost index funds so that you can slowly accumulate wealth in preparation for when you are in a position to move from tenant to homeowner.

How Mortgage Cash Back Offers Can Help Make Home Ownership More Affordable

If you’ve never taken the step towards home ownership before it can feel daunting, but did you know there are ways to make home ownership more achievable?

As well as government initiatives such as the First Home Loan Deposit Scheme, state-specific grants and concessions that help the path to homeownership, cash back mortgages are another tool that can help make home ownership more affordable for you.

Cash back mortgages can help you to save tens of thousands of dollars and shave years off the life of your home loan over the loan term, all at no extra cost to you. Here’s how they work.

All banks and home loan lenders reward mortgage brokers with both an upfront commission and ongoing monthly trail commissions when they receive your home loan business via your mortgage broker.

While many cash back offers are a one-off payment, at Mates Rates Mortgage Brokers we credit ALL of our broker trailing commissions to you as a cash back rebate on your home loan, every single month for the life of your home loan.

And it doesn’t cost you anything!

✔️There’s no fee for our mortgage broking services

✔️You’ll get the same interest rate as you’d receive directly from the lender.

✔️It has all the same package features

The only difference is, we pay cash back to you, every single month!

What you do with your cash back savings is up to you, however if you leave your cash back in your home loan account, you’ll also enjoy compound interest savings, potentially saving you tens of thousands of dollars over the life of your loan and in some cases, reducing your loan term by 12 months or more.

Are you ready to make the move from renting to owning?

Ultimately, whether to rent or buy will depend on your individual circumstances, financial goals, and lifestyle preferences.

However, iIf you’re ready to save money by saying goodbye to rising rents and the rental squeeze and say hello to a long-term investment in financial security and stability, get in touch with Mates Rates Mortgage Brokers.

We are proudly the original and the best cash back mortgage broker. We invented cash-back home loans in 2005 and so far, we’ve paid more than $13 million in cash back to people just like you!

Find out just how much you can save today with our FREE Cash-back Calculator or chat to our team today.