Rising rents and a slowdown in property prices have narrowed the gap between renting and buying a home in several parts of Australia, with monthly mortgage costs now lower than rental payments in some suburbs, according to a recent housing market analysis.
The changing trend could offer an opportunity for tenants considering homeownership, particularly in areas where property values have declined while rental costs continue to climb. However, buying a house remains more expensive than renting in most parts of the country, and the financial benefits vary significantly by location.
An analysis of property data by media Australia, based on figures from property research firm Cotality, found that mortgage repayments were less than $200 a week above rental costs in approximately one in 10 suburbs and towns nationwide. In some locations, estimated home loan repayments were actually lower than the rent for a comparable property.
Australia’s median weekly rent increased by 5.5% in the year to September 2026, reaching $713. During the same period, median property prices for houses and apartments remained broadly unchanged after declining steadily over the preceding six months.
The contrasting movements in rents and property values have made purchasing a home comparatively more attractive in selected markets. Melbourne offers some of the clearest examples of this shift. The median weekly rent for an apartment in the city reached $628 after increasing by 4.8% over the year.
Meanwhile, estimated weekly mortgage repayments for a typical apartment stood at $839, based on a median property value of $624,740 in September. Although buying remained more expensive on this measure across Melbourne overall, the median apartment value had fallen by nearly $25,000 over the previous year.
In several Melbourne suburbs, including Carlton, Melbourne’s central business district, Notting Hill, Travancore and Southbank, estimated mortgage repayments for a typical property were lower than the corresponding rental costs. The comparison was based on a hypothetical 30-year home loan covering 95% of a property’s value at an annual interest rate of 6.2%. It did not include other expenses associated with owning a home, such as maintenance, insurance and other property-related charges.
Buyers contributing a larger deposit could potentially reduce their loan repayments further. The narrowing difference is also evident in Sydney and Canberra. In Sydney, estimated mortgage repayments were approximately $100 a week higher than rents in suburbs such as Ultimo, Warwick Farm, Rosehill, Liverpool and Granville. In Canberra, the difference was below $75 a week in Belconnen and Phillip.
Several additional suburbs, including Braddon, Lyons, Gungahlin and Harrison, came closer to the same level when the comparison was restricted to apartments. The availability of newly built apartments is one factor influencing the market. In neighbourhoods where construction has increased the supply of apartments, property values have come under pressure. At the same time, limited availability in the rental market has continued to push rents upwards, creating a smaller gap between the cost of buying and renting.
The pattern is particularly pronounced in Darwin, where buying was estimated to be cheaper than renting in around a quarter of suburbs. Rents in the city increased by 11.6% over the year. Some of these areas are associated with mining and resource projects, where workers may prefer temporary rental accommodation rather than purchasing a property. Mortgage brokers have also reported increased interest from renters assessing whether they can afford to purchase a home.
Some tenants are exploring the possibility of buying the properties they currently occupy, particularly when landlords decide to sell amid changing market conditions. Despite these developments, the trend does not indicate that homeownership has become broadly affordable across Australia.
Higher interest rates have increased borrowing costs, and mortgage repayments have risen in many suburbs over the past year. In some locations, falling property values have not been sufficient to offset the impact of higher interest rates. The future direction of the market will depend on borrowing costs, property prices and rental growth. If interest rates remain stable and property values decline further, the difference between buying and renting could narrow in additional locations.
Continued increases in rents could also strengthen the financial case for purchasing a home for households that have sufficient savings and qualify for a mortgage. For prospective buyers, the latest figures underline the importance of comparing local property prices and rental costs rather than assuming that renting is always the cheaper option. Nevertheless, the deposit required, loan eligibility and additional expenses of ownership remain crucial considerations before making a long-term financial commitment.
