Is it cheaper to rent or buy in Sydney 2026?

In the short term (under 3 years), renting is usually cheaper due to high upfront costs (stamp duty, LMI). Over 5-10 years, buying wins in most Sydney suburbs because rent inflation (3-4% p.a.) combined with property capital growth (~5-6% p.a.) outpaces mortgage interest. Break-even in St George suburbs is typically year 5-7.

What is the break-even point for buying versus renting in Sydney?

The break-even year is when the buyer’s net position (property value - loan balance - total costs) equals the renter’s (deposit invested at market returns - total rent paid). For an $850K Brighton-Le-Sands unit, break-even typically lands at year 5-7 assuming 6.5% mortgage, 5% growth, 3% rent inflation.

How long should I plan to stay before buying makes sense?

The standard rule is "5 years minimum" because that’s roughly how long it takes for equity build and capital growth to offset upfront costs (deposit, stamp duty, LMI, conveyancing). Shorter hold periods favour renting unless you hit an unusually strong capital growth year.

What costs are included in buying a property in NSW?

Purchase: deposit (typically 10-20%), stamp duty ($0-$40K depending on FHB status), LMI (if <20% deposit), conveyancing ($1,500), building & pest inspection ($600). Ongoing: mortgage repayments (P&I), council rates ($1,500/yr), strata (if unit, $3-6K/yr), insurance, maintenance budget (1% of value/yr).

Does the calculator factor in the opportunity cost of the deposit?

Yes — we model what your deposit would earn if invested in a diversified portfolio (default 7% p.a. after tax) instead of locked in property. This is crucial for honest comparison: a $150K deposit compounding at 7% over 10 years = $295K, which must be deducted from the renter’s apparent losses.

What rent inflation rate should I use for Sydney?

Sydney rent inflation averaged 3% p.a. over the 30 years to 2021, spiking to 10-12% p.a. in 2022-2024 due to under-supply. We default to 3% for long-term modelling but you can model pessimistic (5%) or bull (7%) scenarios.

What capital growth should I use for Sydney property?

Long-term Sydney median: 5.5-6.5% CAGR. Premium suburbs like Brighton-Le-Sands, Dolls Point and Sans Souci have historically outperformed at 7-8% CAGR. Use 4-5% for conservative modelling, 6% for base case, 7-8% for bullish scenarios.

Does the rent-vs-buy calculator include tax benefits?

This calculator focuses on owner-occupier scenarios (no tax deductions, CGT exemption on sale). For investment property scenarios with negative gearing, depreciation and CGT, use our dedicated Investment Performance Calculator.

Rent vs Buy Calculator

Compare the financial outcomes of renting versus buying over time to make an informed decision

Property Purchase Details

Purchase Price

Property purchase price

Deposit

20% of purchase price

Interest Rate

Current mortgage interest rate

Property Appreciation Rate

Expected annual growth (historical avg ~4-6%)

Rental Details

Weekly Rent

Current weekly rent amount

Annual Rent Increase

Expected annual rent increase (typically 2-4%)

Holding Period

Years

How long do you plan to stay in the property?

Year by Year Comparison

Year	Property Value	Equity	Total Rent	Difference
1(Break-even)	$832,000	$198,943	$33,800	+$31,143
5	$973,322	$372,852	$179,449	+$307,255
10	$1,184,195	$637,885	$387,479	+$712,616

Difference: Positive = Buying ahead • Negative = Renting ahead

After 10 Years

Buying Wins

Net Difference

+$712,616

Buying advantage

Buying Net Position

$445,885

Equity built

Renting Net Position

-$266,731

After investments

Break-even Point

Year 1

Buying becomes more advantageous after 1 year

Position Comparison

Buying Position$445,885

Renting Position-$266,731

After 10 Years

Property Value$1,184,195

Total Equity$637,885

Total Rent Paid$387,479

Purchase Summary

Purchase Price$800,000

Deposit (20%)$160,000

Loan Amount$640,000

Est. Stamp Duty (~4%)$32,000

Total Upfront Costs$192,000

Monthly Mortgage$4,045/mo

Weekly Mortgage$934/wk

Rental Summary

Current Weekly Rent$650/wk

Annual Rent (Year 1)$33,800

Rent Increase Rate3% p.a.

Total Rent (10 yrs)$387,479

Key Assumptions:

30-year P&I loan
Deposit invested at 5% return if renting
Ownership costs: rates, insurance, maintenance included
Stamp duty estimated at 4% (NSW rates)
Does not include tax benefits or CGT

Next step

Ready to turn these numbers into a real strategy?

Book a free 20-minute chat with Michael — a local St George buyer’s agent who has closed 200+ deals in the 2216 postcode.

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Includes our 2216 Postcode Complete Buyer’s Guide PDF

0411 818 171

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