What is rentvesting and how does your dream suburb stack up?

Owning a home is an integral part of the Australian dream. Over the years though, buying has become increasingly difficult for anyone who doesn't already have a foothold in the property market.

We recently found that young Australians looking to buy a house will have to own it for over 37 years before they start coming off better off than renting for the same number of years. This number only drops slightly, to 32 years, for people buying units.

Victorians have it the worst, having to wait 44 years for a house or 34 years for a unit until they start seeing the dollar benefits of home ownership.

This paints a pretty bleak picture, which begs the question. Why are Aussies so obsessed with piling our money into property?

Saving for a deposit is no easier. Finder research found that it takes the average first home buyer 12 years to save a deposit for an average-priced unit and 16 years for a house if they started saving today.

This has understandably led to "owning apathy". Almost half (49%) of those who don't own a home say they no longer aspire to owning a home. This equates to 4.1 million people who have given up on the so-called Australian dream.

But is there an answer that allows consumers to buy a house while still maintaining their desired lifestyle? Possibly. What is it called? Rentvesting.

What is rentvesting?

Instead of buying the property they want, rentvesters keep renting in an area they like living in. Then they buy a more affordable investment property somewhere else.

As we established, homeowners generally pay a lot more money in interest compared to rent. Using Finder's mortgage calculator, buying a $700,000 property instead of a $1 million property – thereby reducing the value of your home by $300K – would save you more than $500K over the course of the loan.

However, some Aussies might want to maintain their current lifestyle and don't like the idea of moving suburbs just to get their foot on the property ladder. This is where the much cheaper rental markets of most suburbs can come in handy.

Compare renting vs buying in your suburb

Use the search tool below to see a breakdown of renting and buying statistics for your dream suburb. If your suburb doesn't show this it's because there wasn't enough data to construct a full profile.

It probably comes as no surprise that some of Sydney's most exclusive and expensive suburbs to buy a house in are comparatively cheaper for renters. One factor that could be skewing the results is the difference in house sizes and quality between mortgage holders and renters.

Generally speaking, the high-end stock (read: mansions) of most suburbs would rarely be up for rent. If you had enough money to rent a mansion in Vaucluse, you probably have enough money to buy a mansion in a less expensive suburb elsewhere.

With that said, the minimum income to afford a mortgage on a median property in Woollahra is just shy of the million-dollar mark. Meanwhile, renters need a minimum income of $260,000, almost a quarter of the income required to service a mortgage.

Taking the average hourly wage for NSW of $37.53, homeowners in Strathfield would need to work 108 hours to afford the mortgage repayments. This would require a couple to work 16 hours of overtime every week. Meanwhile, renters in Strathfield only need to work 24 hours per week to afford the average rent.

Victoria displays a similar trend. One of the most famous suburbs, Toorak, requires a minimum of over $1 million to service a mortgage. However, renters have to earn $190,000 a year to lease a house in the coveted suburb. While servicing the rent would take up most of the work week (30 hours) on an average wage, it's still far better than the 170 hours a Toorak homeowner on an average wage would have to work.

While a difference in size and quality of properties is likely at play here, a quick look at Realestate.com.au data on Toorak reveals there are 117 buyers interested for each home currently available on the market. This is compared to an average of 36 renters for each rental property available to be leased. The stark difference in demand could explain some of the disparity between rental and mortgage costs in these suburbs.

What are the downsides to rentvesting?

When rentvesting, you're buying an investment property – you're not living there. This means you'll have to take out an investment loan which usually has higher interest rates than an owner-occupier loan.

There are also several benefits for owner-occupiers who are buying their first home. Investors don't get access to these perks which include grants and discounts on stamp duty. You also won't be able to qualify for first home buyer support later, even if you do end up buying another property as owner-occupiers.

While living in a rental may come with financial upsides in the short term, it comes with some physical downsides. You may have to move every few years depending on your landlord. You also can't make any upgrades or renovations to your home without the landlord's approval.

Finally, and possibly the main reason we're so obsessed with home ownership in this country, rent money is dead money. While your mortgage payments can be counted as a housing cost, they also get you closer to owning a piece of Australian property outright. Rent money, on the other hand, doesn't help to improve your financial standing and really just fills the pockets of your landlord.

Finder's Insights Column examines issues affecting the Australian consumer. It appears weekly on finder.com.au.

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Joshua Godfrey

Senior Insights Analyst

Joshua Godfrey is a Senior Insights Analyst at Finder, specialising in data analysis and identifying emerging trends through the Consumer Sentiment Tracker, a monthly survey on Australians' financial attitudes. He has authored Finder’s 2024 Wealth Building Report and 2025 First Home Buyer Report which have been widely quoted in top media outlets like the AFR and news.com.au. With a Bachelor of Business in Finance and Marketing and a Diploma of Creative Intelligence from UTS, Josh is passionate about uncovering patterns in consumer sentiment and exploring how they influence the future of finance. See full bio

Joshua's expertise

Joshua has written 40 Finder guides across topics including:

• Data and analytics
• Money trends
• Data journalism