Australian Homeownership Challenges Affect Young Buyers

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In 2025, homeownership remains a major challenge for younger Australians as rising property prices, large upfront deposits, and long-term mortgage commitments weigh heavily on first-time buyers. Analysts warn that traditional advice to buy a home as early as possible is no longer as straightforward or financially rewarding as it once seemed.

The median property price across Australia is now approaching $1 million, with Sydney’s median house price already exceeding $1.1 million. For those entering the market, even a 10% deposit can mean saving more than $100,000, not including additional expenses such as stamp duty, rates, and maintenance.

Financial experts caution that many first-home buyers are stretching their finances to secure a property, often locking themselves into 30-year mortgages. While this pathway builds assets over time, it also reduces cash flow and limits flexibility for other investments or lifestyle choices.

Comparisons between renting and buying highlight these trade-offs. For example, renting a property in a sought-after suburb for $700 per week can be significantly cheaper than the weekly cost of owning a similar property, where mortgage repayments, strata fees, and maintenance can reach $1,200 per week or more. Over a year, this gap could amount to around $26,000, excluding the opportunity cost of the initial deposit.

As a result, a growing number of Australians are turning to rentvesting a strategy where individuals rent in their preferred location while investing in property elsewhere. This approach allows buyers to live where they want while still building wealth through real estate ownership.

Rentvesting provides several potential advantages:

Investment Opportunities: Buyers can target areas with stronger growth prospects, even if those locations are outside their desired residential area.

Lifestyle Flexibility: Renting allows for easier relocation for work, study, or personal reasons without the burden of selling a property.

Tax Benefits: Investment properties may provide deductions on interest, depreciation, and other expenses, unlike owner-occupied homes.

Analysts stress that while rentvesting can help younger Australians enter the property market, financial discipline remains crucial. Savings from renting must be directed into investments rather than absorbed by rising living costs or discretionary spending.

The debate over homeownership reflects broader changes in the Australian property market. With prices continuing to rise and affordability remaining a concern, first-time buyers are increasingly seeking alternative strategies to achieve both financial security and lifestyle balance.