These Sydney Suburbs Now Cheaper to Buy Than Rent

Unthinkable just two years ago, buying is now more affordable than renting in several Sydney suburbs as surging rental prices outpace mortgage repayments, according to new analysis from local real estate data providers. Among them: Arncliffe, Ashfield, and pockets of Parramatta, where the cost of servicing a mortgage on a median-priced apartment can now undercut the average weekly rent.

Renters Stung as Weekly Outlays Soar

The shift is sparking interest among frustrated renters and first-home buyers. The last quarterly report from Domain showed Sydney’s median unit rent at $710 per week, up nearly 14% year-on-year and easily the highest of all capital cities. Vacancy rates across the inner and middle rings – including hotspots like Dulwich Hill and Campsie – remain below 1.5%, their tightest levels since 2012. The squeeze is worst near transport hubs and hospital precincts, with St Peters and Macquarie Park landlords commanding the steepest hikes.

This matters because, until recently, Sydney’s daunting property prices outpaced even sky-high lease rates. The usual logic: it costs less to rent than to buy, especially when factoring in interest rates hovering above 6% for new home loans. But multi-year rent hikes have altered the equation in select pockets, particularly where apartment prices have barely moved since their 2021 peak.

Suburb Snapshots: Arncliffe and Ashfield Lead the Turnaround

In Arncliffe, just south of the CBD, a two-bedroom unit on Forest Road now rents for approximately $700 per week, according to REINSW figures. By contrast, the median sale price for similar apartments this quarter sat at $682,000. With a 20 percent deposit – $136,400 – and a 6.1% variable loan, monthly repayments after current owner-occupier discounts hover around $1,989 ($459 weekly). Once strata and council are factored in, the weekly buy cost sits near $590, $110 less than renting.

Ashfield shows a similar pattern. Listings on Charlotte Street, for instance, include two-bedroom units renting for $720 weekly, compared to a median sale price of $699,000 for comparable older stock. Despite record high interest rates, the numbers tip in buyers’ favour: purchase costs, including average holding expenses, trail weekly rents by $60-100. Lenders like Teachers Mutual Bank and St.George have seen a spike in loan pre-approvals for first-home buyers in these corridors since April.

In Parramatta’s Church Street precinct, some well-located 2020-built apartments remain below their off-the-plan sale price, while rents have jumped 26% since mid-2022. The gulf has led some would-be tenants to calculate lifetime housing costs and shift to purchase mode, agents report.

Changing Economics and Next Steps

Latest figures from PropTrack show 13 Sydney suburbs where buying a median-priced unit is now cheaper on a weekly basis than renting it. The trend is most pronounced in older unit blocks within 12km of the CBD, especially where investors have offloaded properties and supply has ticked up slightly amid a surge of migration.

Would-be buyers should move carefully. While it may cost less per week to buy than rent in these select areas, upfront costs like stamp duty – at least $27,000 on a $700k property – are steep, and jobs flexibility matters as interest rates have not yet begun to fall. Owner-occupiers also benefit from first home buyer concessions, including the state’s Shared Equity Home Buyer Helper and up to $10,000 in First Home Owner Grants, which can help lower entry barriers.

For now, buyers targeting Arncliffe, Ashfield and select corners of Parramatta’s high-rise zone may find themselves in the rare position of paying less each month than their renting neighbours. But with new supply tight and immigration at record highs, there’s no guarantee these affordability windows will last through spring.