Is Renting Actually Cheaper Than Buying Right Now?

Weekly rents in parts of Sydney’s inner ring now fall below the cost of servicing a mortgage on the same property type, according to fresh calculations that factor in current interest rates and median sale prices. A two-bedroom unit in Leichhardt listed at $1.35 million carries a repayment of roughly $1,850 a week at 6.1 per cent interest, while comparable rentals on the same street average $1,050 a week.

The gap has widened since the Reserve Bank held the cash rate steady through the first half of 2026, pushing variable mortgage rates above 6 per cent for most owner-occupiers. At the same time, new home starts across New South Wales dropped 11 per cent in the March quarter, tightening supply and supporting rents even as buyer demand cooled in premium pockets of the Inner West and Northern Beaches.

Street-level numbers

Along King Street in Newtown, agents report two-bedroom terraces renting for $1,100 a week while similar freehold properties sell near $1.8 million. Further north on Military Road in Cremorne, unit rents average $950 a week against a median sale price of $1.25 million. Both figures sit below the repayment threshold once stamp duty, strata levies and maintenance are added to the ownership side.

Domain’s June data showed Sydney’s overall median dwelling price holding at $1.4 million, with clearance rates between 65 and 72 per cent across the past six auction weekends. The NSW government’s existing first-home buyer stamp-duty concessions have not closed the gap for properties above $1.2 million, leaving many households weighing ongoing rent against the higher entry cost of ownership.

Next steps for households

Buyers still considering a move should run precise repayment figures through their lender using today’s fixed-rate options, which sit around 5.8 per cent for three-year terms. Renters weighing a purchase can compare current listings on realestate.com.au against the NSW Rental Bond Board median rent index for the same postcode before committing to a contract.

With construction forecasts pointing to further supply shortfalls into 2027, the rent-buy differential is unlikely to reverse quickly in established inner-ring suburbs.

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.