Property · March 2026, updated August 2026 · 8 min read

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.

Tepuy Solutions March 15, 2026 Updated August 2, 2026
⚠️ Updated August 2026: Tax assumptions in this article have been updated to reflect 2026-27 Budget changes. The negative gearing figures reflect the new rules for properties purchased after 12 May 2026; if you purchased before that date, negative gearing is grandfathered. CGT works differently and is not grandfathered by purchase date: the 50% discount applies to gains from CGT events before 1 July 2027 and CPI indexation plus a 30% minimum tax applies to gains accruing from that date, however long you have held the asset. Model your specific situation using our calculator.

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 method is cashflow-neutral over 30 years and matches the Beat the ASX breakeven model — including its flat 3.5% national rental-yield assumption, and, like that model, it compares pre-tax outcomes: no income tax on investment returns and no CGT on either side are applied to the figures below. Tepuy's full property vs shares calculator models stamp duty, maintenance and rental income on top of this; run it there for a figure that includes them.

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.

Assumptions used across all cities Mortgage rate: 6.2% p.a. (current variable average) · Deposit: 20% · Share return: 8.5% p.a. (conservative ASX 200 long-run average) · Time horizon: 30 years · Income tax: not applied — the Beat the ASX breakeven model this post uses compounds share returns gross (sharesValue() applies no tax drag) and takes property equity as final value minus loan balance, so every figure below is pre-tax on both sides · CGT: not applied to the figures below — this comparison is pre-tax on both sides. For context, the 50% discount applies to CGT events before 1 July 2027 and CPI indexation plus a 30% minimum tax applies from that date, by date of sale rather than date of purchase (Acts No. 49 and 50 of 2026) · Property growth: city-specific (see table below) · Rent: estimated as a flat 3.5% gross yield of each city's median price, not from city-specific rental data — which is why the break-even growth rate comes out the same 6.0% in all eight cities, and why the purchase price changes the dollar gaps but not the percentage · No stamp duty, maintenance, or rental income modelled — use the full calculator for those.

The property growth rates are the most important assumption. They are conservative forward-looking assumptions, not historical averages: Sydney 4.5%, Melbourne 4.0%, Brisbane 5.0%, Perth 5.0%, Adelaide 4.5%, Hobart 3.5%, Canberra 4.0%, Darwin 3.0%. Seven of the eight sit at or below that city's own CoreLogic 30-year average — the exception is Perth, whose 5.0% is marginally above its 4.9%. Each city's historical average is stated alongside its forward rate in the city sections below, so you can see the gap in either direction. Because they differ by city they change the dollar outcomes materially — but not the break-even rate, which is 6.0% everywhere here for the flat-yield reason given above.

The full city comparison

City Median price Deposit Prop growth Property wealth (30yr) Shares wealth (30yr) Winner Margin
Sydney $1.61M $322k 4.5% $6.03M $9.36M Invest $3.33M
Melbourne $978k $196k 4.0% $3.17M $5.68M Invest $2.51M
Brisbane $1.13M $226k 5.0% $4.88M $6.57M Invest $1.68M
Perth $1.03M $206k 5.0% $4.45M $5.99M Invest $1.53M
Adelaide $981k $196k 4.5% $3.67M $5.70M Invest $2.03M
Hobart $779k $156k 3.5% $2.19M $4.53M Invest $2.34M
Canberra $1.05M $210k 4.0% $3.41M $6.10M Invest $2.70M
Darwin $710k $142k 3.0% $1.72M $4.13M Invest $2.40M

The pattern has shifted: at the indicative 2026 medians used here, 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. Under this model the break-even growth rate is the same in every capital — 6.0% — because rent is estimated as a flat 3.5% gross yield of the purchase price nationwide, so price cancels out of the percentage. No capital's 30-year historical average reaches that bar, Darwin's included, so none of the eight is a defensible buy case on these assumptions. What differs between cities is the size of the gap, not the rate required.

City by city breakdown

Sydney 🏙️

Invest wins · $3.33M ahead

Median price

$1.61M

Property (30yr)

$6.03M

Shares (30yr)

$9.36M

Sydney has crossed a threshold. A $322k deposit on a $1.61M house growing at 4.5% annually produces $6.03M in equity after 30 years — but the renter's deposit plus the mortgage-minus-rent savings compounds to $9.36M. The gap is $3.33M. Sydney needs 6.0% annual growth to break even against the ASX — 0.6 percentage points above its 30-year historical average of 5.4%. That 6.0% is the bar in every city in this model, not a Sydney figure. 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 · $2.51M ahead

Median price

$978k

Property (30yr)

$3.17M

Shares (30yr)

$5.68M

Melbourne is the clearest invest case among the major capitals. At $978k median with 4.0% forward growth, the shares portfolio wins by $2.51M over 30 years. Melbourne needs 6.0% annual growth to break even — above its 5.1% historical average. That is the same bar every city faces here; Melbourne's case rests on the size of the gap, not on a higher hurdle. 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 · $1.68M ahead

Median price

$1.13M

Property (30yr)

$4.88M

Shares (30yr)

$6.57M

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 $1.68M over 30 years. Brisbane needs 6.0% annual growth to break even against the ASX — the same bar as every other capital here — above its 5.1% 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 · $1.53M ahead

Median price

$1.03M

Property (30yr)

$4.45M

Shares (30yr)

$5.99M

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 $1.53M. Perth needs 6.0% annual growth to break even against the ASX — the same bar as every other capital here — 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 · $2.03M ahead

Median price

$981k

Property (30yr)

$3.67M

Shares (30yr)

$5.70M

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 $2.03M over 30 years. Adelaide needs 6.0% annual growth to break even — the same bar as every other capital here — 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 · $2.34M ahead

Median price

$779k

Property (30yr)

$2.19M

Shares (30yr)

$4.53M

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 $2.34M over 30 years. Hobart needs 6.0% annual growth to break even — the same bar as every other capital here — well 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 · $2.70M ahead

Median price

$1.05M

Property (30yr)

$3.41M

Shares (30yr)

$6.10M

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 $2.70M over 30 years at 4.0% growth. Canberra needs 6.0% annual growth to break even — the same bar as every other capital here — 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 · $2.40M ahead

Median price

$710k

Property (30yr)

$1.72M

Shares (30yr)

$4.13M

Darwin is now the most interesting case in the analysis. After 35% growth in five years, the median house sits at $710k. An earlier version of this article reported that Darwin needed only 4.1% growth to break even and was therefore the one defensible buy case. That was wrong: this model applies a flat 3.5% gross rental yield nationwide, so the purchase price cancels out and Darwin faces the same 6.0% bar as every other capital — which its 4.5% historical average does not reach. On these assumptions Darwin is not a buy case either, and the structural risks (resource sector dependence, population volatility) remain real on top of that. At current prices and growth rates, investing wins by $2.40M.

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 the indicative 2026 medians used here, investing the deposit wins in every major capital city using conservative but historically grounded growth assumptions. The question is no longer "which city favours buying?" — it is "do you believe your city will beat its own history by enough?" On these assumptions every capital faces the same 6.0% bar, and no capital's 30-year average reaches it. Note what that bar is and is not: it comes from a flat 3.5% national rental yield, so it is a property of the assumptions, not a measurement of any individual city. A city with a genuinely higher rental yield than 3.5% would face a lower bar than this model shows.

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 — for properties held before 12 May 2026, or new builds. Negative gearing is being abolished for established properties purchased after that date, from 1 July 2027, with losses on those properties quarantined to rental income instead of offsetting salary. 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?

CityVerdictStrengthKey driver
DarwinInvestClosest caseMost affordable — needs 4.1% vs 4.5% hist avg
PerthInvestModeratePrices doubled — leverage advantage eroded
BrisbaneInvestModerate86% price growth in 5yr changed the equation
HobartInvestModerateFlat growth, high prices relative to income
AdelaideInvestClear80% price surge — now priced like Sydney was
MelbourneInvestClearWeakest growth, near $1M median
CanberraInvestClearHigh prices, government sector slowing
SydneyInvestStrong$1.61M median needs 6.0% 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.

Disclaimer: This article reflects Australian tax law as at August 2026, including changes announced in the 2026-27 Federal Budget (Acts No. 49 and 50 of 2026) — the abolition of negative gearing for established residential property purchased after 12 May 2026 (from 1 July 2027), and the replacement of the 50% CGT discount with CPI cost-base indexation plus a 30% minimum tax for gains accruing from 1 July 2027. The two have different triggers: negative gearing turns on the 12 May 2026 purchase date, and property purchased before then remains grandfathered for that purpose indefinitely. CGT does not turn on the purchase date at all — gains from CGT events before 1 July 2027 keep the 50% discount whenever the asset was bought, and gains accruing from that date are indexed with a 30% floor even on long-held assets. The discount also survives by election for eligible new residential dwellings, and the affordable housing discount of up to 60% is retained. This article is for informational and educational purposes only. It does not constitute financial advice. All scenarios use simplified models and illustrative growth assumptions. Actual property and share returns will differ. Stamp duty, maintenance, rental income, franking credits, and individual tax circumstances are not fully modelled. Always consult a licensed financial adviser before making investment decisions. Growth rate assumptions are based on historical CoreLogic data and do not guarantee future performance.