More people are renting due to housing affordability crises (high prices, interest rates), making homeownership unattainable, coupled with a shift towards lifestyle choices for flexibility, increased demand from immigration and smaller households, and a lack of new housing supply, leading many to rent long-term or become "forever renters". This creates a complex market where renting is a necessity for many, but also a preferred, professionally managed option for others.
At a Glance: Why Renting is on the rise
High mortgage rates make buying a home too expensive for many. Home prices are rising, making down payments harder to afford. Renting offers flexibility, allowing people to relocate easily. No maintenance costs—homeowners bear repair expenses, renters don't.
This rapid population increase has far outpaced the construction of new dwellings, creating an immediate supply-demand imbalance. Beyond migration, the rise of remote work has enabled many people to relocate from expensive capital cities to regional areas, putting pressure on rental markets that were previously stable.
At the end of the day, renting vs buying in Australia in 2025 isn't about which option is universally better—it's about what's right for you. Renting can be the smart play if you value flexibility or need time to save. Buying makes sense if you're financially ready and want to start building equity.
The 30% rent rule is a guideline suggesting you shouldn't spend more than 30% of your gross or net income on rent to ensure affordability, allowing funds for other essentials like groceries and transport, and is often used by property managers to assess applicants; however, in expensive markets, it's sometimes stretched to 40-50%, or considered outdated by some, but it remains a common benchmark for housing affordability and "rental stress".
Rental yield expectations vary by property type and location. In Sydney overall, a good gross rental yield is typically considered 3.2%+ for houses and 4.5%+ for units. On the Northern Beaches, recent data shows: Houses – average gross yield around 2.6%, with high-demand pockets achieving closer to 3% or more.
Using this free income calculator, the approximate income you need to buy a $500,000 home, assuming you need a $400,000 loan, is $77,000 gross per year, excluding superannuation.
In fact, at the end of the five years, if you invest $1,000 per month you would have $83,156.62 in your investment account, according to the SIP calculator (assuming a yearly rate of return of 11.97% and quarterly compounding).
Structural damage (foundations, roof, termites) and poor location (noise, crime, bad schools) decrease property value the most, alongside significant neglect like outdated kitchens/bathrooms, peeling paint, and unapproved renovations, as these signal major costs and headaches for buyers, with factors like proximity to landfills, power plants, or high-traffic roads also causing significant drops.
Yes, $70k is a fair salary in Australia, often near the median income, making it a decent living for a single person, especially outside major cities, but it can be tight in expensive areas or for those with high living costs like mortgages, with full-time averages now closer to $90k-$100k.
You do not have to agree to the rent increase or sign a new tenancy agreement. But your landlord could take steps to end your tenancy if you do not agree. For example, with a section 21 notice. If your contract has a rent review clause, it should say how often the rent could go up.
A significant portion of Australians, around 40-45% (over 9 million people), have less than $1,000 in savings, highlighting widespread financial vulnerability due to high living costs, with many living paycheck-to-paycheck and facing major stress from unexpected expenses. This contrasts with median savings figures, where some reports show Australians having tens of thousands saved, though these averages are skewed by "super savers" and exclude superannuation.
Key findings. 12 million baby boomers — or 18.6% of the generation — rent. That rate is far lower compared with Gen Zers (48.6%), millennials (41.1%) and Gen Xers (26.1%).
A Section 21 allows landlords to evict tenants without giving a reason. After receiving a Section 21 notice, tenants have just two months before their landlord can apply for a court order to evict them. Rising rents and arrears make it more likely that landlords will issue tenants with a Section 21 eviction notice.
Renters are not tied down to one place, and can relocate fairly easily. This is important to families who may have a change of employment or school. Busy families who do not have the time for maintenance and repairs. Empty nesters who do not want the responsibility of owning a home and want to use their time to travel.
Investing $1,000 in Coca-Cola (KO) stock 20 years ago (around early 2006) would have grown to roughly $6,000 to $8,000 by late 2025, assuming reinvested dividends, but it significantly underperformed the S&P 500 index, which would have turned $1,000 into about $20,000 over the same period, highlighting that while Coca-Cola offers stability, diversification and broader market index funds often yield better long-term returns.
The 7-3-2 rule is a wealth-building strategy highlighting compounding's power, suggesting it takes roughly 7 years to save your first significant amount (like a crore), then 3 years for the second, and only 2 years for the third, by increasing contributions and leveraging exponential growth as your money compounds faster. It emphasizes discipline in the initial phase, then accelerating savings as returns kick in, making later wealth accumulation quicker and more dramatic.
The 7-5-3-1 rule is a simple investing framework for mutual fund SIPs that builds long-term wealth. It means seven years of discipline, five categories of diversification, and overcoming three emotional hurdles. Add one annual SIP increase to accelerate growth.
On a $100k salary in Australia, you might borrow between $330,000 and $600,000, but it highly depends on lender policies, interest rates, existing debts (car, credit cards), living expenses, and deposit size, with many lenders using serviceability buffers, suggesting figures closer to the lower end, while others might offer more if you have minimal expenses and debt. Use an online borrowing calculator from banks like NAB, CommBank, or ING for a personalized estimate.
Australians may need an annual income of $113,000–$336,000 to buy a house in a major city, or $76,000–$163,000 for a unit, based on Domain's June 2025 House Price Report.
The 2% property rule is a real estate investing guideline where you check if a rental property's monthly rent is at least 2% of its purchase price, indicating strong potential for positive cash flow and profitability; you calculate this by dividing the monthly rent by the property's total price and multiplying by 100, aiming for 2% or more to deem it a good deal, though it's a simplified metric, notes Rentana and Abacus Finance.
A 10% ROI may be realistic depending on the investment type. As noted above, the S&P 500 had an average annual ROI of 12% from 1928 to 2024. Keep in mind this is only an historical average. Double-digit profits and losses are possible from year-to-year, and past success is not indicative of future results.
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