Australia’s Elite Postcodes Where Renting Costs Less Than Buying
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- Sep 24
- 2 min read
Australia’s most prestigious postcodes aren’t just playgrounds for million-dollar buyers – they’re actually a great deal for renters too.
New research from Domain shows that in elite suburbs, the gap between paying rent and paying off a mortgage can be massive – sometimes thousands of dollars cheaper each month to rent instead of buy.
Domain senior economist Joel Bowman asked the classic question: is it cheaper to rent or buy? His answer: for those who want a glamorous lifestyle, renting wins out at the top end of the market.
“At the very premium end, you get the largest gap where it is a lot cheaper to rent compared to buying,” Bowman explained.
Take Bellevue Hill in Sydney’s east. Buying there could cost you a staggering $7913 more per month in mortgage repayments compared to renting. Other Sydney hot spots with big gaps include Vaucluse (+$5008), Mosman (+$4118), Northbridge (+$3777) and Rose Bay (+$3523).
In Melbourne, Toorak tops the list at $3240 more to buy than rent, followed by Canterbury, Balwyn, Malvern and Middle Park.
Interestingly, in many of these suburbs – Bellevue Hill, Toorak, Vaucluse, Mosman, Northbridge and Rose Bay – renters actually outnumber people paying off a mortgage, according to the last census.
For Martin Stark, a long-time Mosman resident, the suburb’s lifestyle was irresistible. Originally from the UK, he first tested Mosman as a renter before buying an apartment there years later.
“Going down to Balmoral Beach on a Sunday afternoon, coming from the UK, felt like I’d been away to Barcelona for a weekend, but it was a five-minute walk,” he said.
Economists say the divide comes down to priorities:
Buyers are chasing capital growth and future financial benefits, which they’re willing to pay a premium for.
Renters are seeking lifestyle and value – without the same long-term financial incentives.
As buyers’ agent Steve Palise points out, investors aren’t too worried about softer rental yields because these blue-chip suburbs have a proven track record.
“They are all statistically long-established areas,” he said. “You can get repeated data for the last 30 to 50 years and so they are very low risk in regards to capital growth over the long term.”
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