Should you buy or rent
in Australia? I modelled
every city
The answer depends entirely on which city you're in. Brisbane and Perth strongly favour buying. Melbourne and Hobart favour investing. Sydney is a genuine coin flip. Here's the full breakdown.
The rent vs buy debate in Australia generates more heat than light. Most articles either make a sweeping claim ("renting is dead money") or dismiss buying entirely ("Sydney is unaffordable"). Neither is useful.
The reality is more nuanced — and more interesting. Whether buying or renting and investing beats depends on three numbers specific to your city: the purchase price, the local rent, and the plausible property growth rate. Change any one of these and the conclusion flips.
So I modelled it properly for every major Australian city using 2026 median prices, current mortgage rates, and historically grounded growth assumptions. The methodology is the same one used in Tepuy's full property vs shares calculator — cashflow-neutral, tax-adjusted, over 30 years.
The methodology
The comparison is cashflow-neutral. This means both the buyer and the renter have identical total monthly cash outflows. The renter invests their deposit upfront and adds the difference between the mortgage payment and rent to their portfolio each month. This is the only honest way to compare — anything else is comparing different savings rates, not different assets.
The property growth rates are the most important assumption. I've used city-specific historical averages based on CoreLogic data, which produces meaningfully different results across cities — as you'll see below.
The full city comparison
| City | Median price | Deposit | Prop growth | Property wealth (30yr) | Shares wealth (30yr) | Winner | Margin |
|---|---|---|---|---|---|---|---|
| Sydney | $1.61M | $322k | 4.5% | $6.02M | $10.82M | Invest | $4.80M |
| Melbourne | $978k | $196k | 4.0% | $3.17M | $5.56M | Invest | $2.39M |
| Brisbane | $1.13M | $226k | 5.0% | $4.87M | $6.56M | Invest | $1.70M |
| Perth | $1.03M | $206k | 5.0% | $4.46M | $5.29M | Invest | $834k |
| Adelaide | $981k | $196k | 4.5% | $3.67M | $5.47M | Invest | $1.80M |
| Hobart | $779k | $156k | 3.5% | $2.19M | $3.71M | Invest | $1.52M |
| Canberra | $1.05M | $210k | 4.0% | $3.41M | $5.85M | Invest | $2.44M |
| Darwin | $710k | $142k | 3.0% | $1.72M | $2.36M | Invest | $366k |
The pattern has shifted: at February 2026 prices, investing wins in all eight capitals under conservative growth assumptions. The cities that were clear buy cases — Brisbane, Perth, Adelaide — have been repriced by 80–90% growth in five years. Darwin is now the only city where the breakeven growth rate sits below its historical average, making it the sole defensible buy case on pure mathematics.
City by city breakdown
Sydney 🏙️
Invest wins · $4.80M aheadMedian price
$1.61M
Property (30yr)
$6.02M
Shares (30yr)
$10.82M
Sydney has crossed a threshold. A $322k deposit on a $1.61M house growing at 4.5% annually produces $6.02M in equity after 30 years — but the same deposit invested in shares compounds to $10.82M. The gap is $4.80M. Sydney now needs 6.6% annual growth to break even against the ASX — a full 1.2 percentage points above its 30-year historical average of 5.4%. The five years of price growth that made existing owners wealthy has made buying a much harder wealth decision for new buyers.
Melbourne 🏙️
Invest wins · $2.39M aheadMedian price
$978k
Property (30yr)
$3.17M
$5.56M
Shares (30yr)
Melbourne is the clearest invest case among the major capitals. At $978k median with 4.0% forward growth, the shares portfolio wins by $2.39M over 30 years. Melbourne needs 6.0% annual growth to break even — above its 5.1% historical average. The combination of near-$1M prices, elevated land tax for investors, and weaker population growth than other capitals makes this a compelling case for keeping your deposit in the market. Melbourne is the strongest structural case for renting and investing among all eight capitals.
Brisbane 🌞
Invest wins · $1.70M aheadMedian price
$1.13M
Property (30yr)
$4.87M
Shares (30yr)
$6.56M
Brisbane's story has fundamentally changed. After 86% price growth in five years, the median house now sits at $1.13M — making Brisbane more expensive than Melbourne on a house-only basis. At 5.0% forward growth, investing the deposit wins by $1.70M over 30 years. Brisbane now needs 6.1% annual growth to break even against the ASX, above its historical average. The window where Brisbane's affordability and growth made buying a clear winner has closed. The 2032 Olympics effect is now priced in.
Perth ☀️
Invest wins · $834k aheadMedian price
$1.03M
Property (30yr)
$4.46M
Shares (30yr)
$5.29M
Perth has undergone the most dramatic repricing of any Australian capital — up 90% in five years to a $1.03M median. At current prices with 5.0% forward growth, investing wins by $834k. Perth needs 5.6% annual growth to break even against the ASX — above its 4.9% historical average. The resources-driven boom has delivered extraordinary returns for existing owners, but at current entry prices, the leverage advantage that made Perth a clear buy case has been substantially eroded.
Adelaide 🍷
Invest wins · $1.80M aheadMedian price
$981k
Property (30yr)
$3.67M
Shares (30yr)
$5.47M
Adelaide has been one of Australia's fastest growing markets, surging 80% in five years to a $981k median — now nearly at parity with Melbourne. At 4.5% forward growth, investing wins by $1.80M over 30 years. Adelaide needs 5.9% annual growth to break even — above its 5.2% historical average. The affordability advantage that drove Adelaide's buy case has largely disappeared. At near-$1M entry prices, the risk-return profile now favours shares.
Hobart 🌿
Invest wins · $1.52M aheadMedian price
$779k
Property (30yr)
$2.19M
Shares (30yr)
$3.71M
Hobart's extraordinary 2015–2022 boom pushed the median house to $779k — high relative to local incomes and the city's economic fundamentals. Growth has normalised to 3.5% long-run. At current prices, investing wins by $1.52M over 30 years. Hobart needs 5.3% annual growth to break even — above its 4.4% historical average. Renting and investing is a clear result in Hobart, driven by the structural limits of a small, isolated market that has already had its moment.
Canberra 🏛️
Invest wins · $2.44M aheadMedian price
$1.05M
Property (30yr)
$3.41M
Shares (30yr)
$5.85M
Canberra was the tightest result in our previous model — a $14k difference on an $850k purchase. At the current $1.05M median, that tie has broken clearly in favour of investing. Shares win by $2.44M over 30 years at 4.0% growth. Canberra needs 5.9% annual growth to break even — above its 5.0% historical average. The slowdown in public sector hiring and a softening in government property demand has removed the structural floor that made Canberra such a tight case. Canberra has shifted from a coin flip to a clear invest case.
Darwin 🌴
Invest wins · $366k aheadMedian price
$710k
Property (30yr)
$1.72M
Shares (30yr)
$2.36M
Darwin is now the most interesting case in the analysis. After 35% growth in five years, the median house sits at $710k — but Darwin still needs only 4.1% annual growth to break even against the ASX, making it the closest city to a viable buy case. Its 4.5% historical average actually exceeds the breakeven rate. Darwin is the one city where buying remains mathematically defensible — though the structural risks (resource sector dependence, population volatility) remain real. At current prices and growth rates, investing still wins narrowly by $366k.
Run your own numbers
These are median scenarios. Your rent, deposit, and income will change the result. Try the quick calculator with your actual numbers — takes 30 seconds.
Try the quick calculator → Full model with CGT, stamp duty, and depreciation →What actually determines the outcome
After running eight cities, three variables dominate the result:
Property growth rate is the swing factor. Moving from 4.0% to 5.5% growth — the difference between Melbourne and Brisbane — completely reverses the result despite similar price levels. Getting this assumption right matters more than any other input. Historically, capital cities have averaged 4–6% over 30-year windows, but this varies considerably and the future is uncertain.
The price-to-rent ratio matters enormously. After the 2020–2025 boom, price-to-rent ratios have blown out across every capital. Brisbane and Perth — previously the standout buy cases because of their favourable ratios — have now converged toward Sydney levels. The monthly mortgage on a Brisbane house is now nearly double the median weekly rent, eliminating much of the cashflow advantage the investor used to have in those markets.
Share returns are the other side of the ledger. All scenarios use 8.5% as a conservative long-run assumption for the ASX 200 including dividends. If Australian shares return 10% (their very long-run historical average), every "invest wins" result gets stronger and several "buy wins" results flip. If shares return only 6–7%, property wins more often.
The honest conclusion: the price appreciation of 2020–2025 has fundamentally changed the buy vs invest calculus across Australia. At February 2026 prices, investing the deposit wins in every major capital city using conservative but historically grounded growth assumptions. Darwin is the closest to a break-even case. The question is no longer "which city favours buying?" — it is "what growth rate does your city need, and do you believe it will deliver it?" Every city now requires above-average historical growth just to match the ASX.
The cases this analysis misses
This comparison is intentionally simplified. It does not capture several factors that could materially change the result for your situation:
Stamp duty adds $30,000–$60,000 in upfront costs in most states and takes years to recoup. This weakens the buying case, particularly in shorter time horizons. The full Tepuy calculator includes state-specific stamp duty for all 8 states.
Rental income on investment properties improves the property case but introduces vacancy, management fees, and maintenance costs. For owner-occupiers, rental income is irrelevant but the mortgage interest is not tax deductible — which weakens the property case slightly.
Negative gearing can significantly improve after-tax returns for investment properties, particularly for high-income earners. This is fully modelled in the property vs shares calculator with FIFO CGT and Division 40/43 depreciation schedules.
Leverage risk cuts both ways. A $1.2M mortgage magnifies gains in rising markets — but also magnifies losses in falling ones. The shares investor has no forced leverage, which means their downside is limited to their portfolio value. This asymmetry is not captured in an expected-return model.
Summary: what city are you in?
| City | Verdict | Strength | Key driver |
|---|---|---|---|
| Darwin | Invest | Closest case | Most affordable — needs 4.1% vs 4.5% hist avg |
| Perth | Invest | Moderate | Prices doubled — leverage advantage eroded |
| Brisbane | Invest | Moderate | 86% price growth in 5yr changed the equation |
| Hobart | Invest | Moderate | Flat growth, high prices relative to income |
| Adelaide | Invest | Clear | 80% price surge — now priced like Sydney was |
| Melbourne | Invest | Clear | Weakest growth, near $1M median |
| Canberra | Invest | Clear | High prices, government sector slowing |
| Sydney | Invest | Strong | $1.61M median needs 6.6% growth — hist avg 5.4% |
If you want to run your specific scenario — your rent, your deposit, your income, and your city — the quick calculator gives you an instant result. If you want the full analysis including CGT, stamp duty, negative gearing, and Monte Carlo risk modelling, the full Tepuy calculator is the most comprehensive free tool available in Australia.