Rent vs buy: should you keep renting or buy your first home?

The short answer: there's no universal winner. The honest comparison isn't rent versus your mortgage — it's the cost of renting versus the true cost of owning: the interest, council rates, strata, insurance, maintenance and the one-off costs of buying and selling, none of which build you any equity. Buying tends to win the longer you stay, because those transaction costs take years to earn back — so a short horizon often favours renting and investing the difference. Apartments add their own wrinkle (strata fees, and historically weaker capital growth than houses). In the end it turns on three things: how long you'll stay, how stable your income is, and how much you value security over flexibility.

Meet Jordan, again

When we last sat with Jordan, she was saving her deposit inside super through the First Home Super Saver Scheme — 29, single, a data analyst on a steady salary, renting a flat in inner Melbourne and eyeing a one-bedroom apartment she could afford on one income. She'd got good at building the deposit. What she hadn't settled was the question underneath it: should she buy at all, or just keep renting?

Her group chat had opinions. "Rent money is dead money," someone said, the way people always do. Her uncle swore renting was throwing cash away. A friend who'd bought an apartment in 2016 said it was the best thing she ever did; another said hers had barely moved in value and the strata fees were brutal. Jordan wanted the actual maths, not the slogans.

Jordan isn't a real person — but her situation is. Every rule and number in this story is real and linked to its source below.

The myth: "rent money is dead money"

It's the line that ends most rent-vs-buy conversations before they start — and it's only half true.

Yes, rent buys you no equity. But look at what you pay when you own, and a surprising amount of it builds no equity either: the interest on your loan (in the early years, most of your repayment), council rates, water, building insurance, strata or owners-corporation fees, and maintenance when the hot-water system dies. Only the principal portion of your repayment is actually savings — the rest is, in the same sense people mean, "dead."

So the real contest isn't rent versus mortgage. It's the cost of renting versus the non-equity cost of owning — and once you frame it that way, the gap is far smaller than the slogan suggests. The mechanics are laid out plainly at Moneysmart.

The number that actually decides it: how long you'll stay

Here's the lever most people miss. Buying carries big one-off costs that renting doesn't: on the way in, conveyancing, inspections, loan fees and (above the first-home thresholds) stamp duty; on the way out, agent commission and marketing when you sell. Together they can run to tens of thousands of dollars, and they buy you no home — they're just the cost of the transaction.

That's why time horizon is everything. Spread those costs over ten years and they're a rounding error; spread them over two, and they can wipe out any gain, leaving you worse off than if you'd rented and invested your deposit. There's no single magic number, but the break-even is usually several years — so the honest question isn't "can I buy?" but "am I going to stay put long enough for buying to pay off?"

The apartment wrinkle

Jordan's target — a one-bedroom apartment — comes with two things a house doesn't. Strata (owners-corporation) fees are an ongoing cost that can be significant, especially in buildings with lifts, gyms or pools. And historically, apartments have grown in value more slowly than houses, because it's the land that appreciates and an apartment comes with only a sliver of it.

That doesn't make an apartment a bad buy — it's often the only realistic entry point on one income, it can be exactly the right home, and the security it brings is real. It just means the "forced savings that quietly grow" argument for buying is weaker for a unit than for a house on its own block, and Jordan should lean less on future capital growth and more on the other reasons to own.

What tips it, beyond the maths

If the pure numbers land close — and they often do — the decision comes down to things a calculator can't weigh:

• Security. In Australia, renting can mean a lease not renewed, a rent rise, or being asked to leave so the owner can sell. Owning trades that uncertainty for a mortgage you control. For some people that stability is worth a lot; for others it isn't the priority yet.
• Flexibility. If your job, your city or your relationship might change in the next couple of years, renting keeps you nimble — and dodges those buy-and-sell costs.
• Forced saving. A mortgage makes you build equity whether you're disciplined or not. Renters can invest the difference and do just as well — but only if they actually do it. Jordan, saving hard through super, was one of the few who genuinely would.
• Rate risk. As an owner, a rate rise lands on you. Renting doesn't insulate you forever, but it changes who carries that risk in the short term.

How it played out

Jordan didn't get a verdict — she got clarity. The maths said buying and renting were closer than her uncle believed, that the apartment's value might not rocket the way her friend's house had, and that the whole case rested on one thing: staying long enough. So that became her real question. She wasn't planning to leave Melbourne, she wanted the stability of her own place, and she was already saving as if she had a mortgage.

That tipped it. She decided to buy — but with her eyes open about the apartment's growth, budgeting for strata from day one, and treating it as a home she'd hold for years, not a quick win to flip. The slogan never settled it. Her time horizon did.

If you're like Jordan

This is exactly the comparison Havenli runs with you — not a slogan, but the true cost of owning a specific home (interest, rates, strata, maintenance and all) set honestly against what you're paying to rent, with the break-even horizon for your situation and the growth reality of the property type you're considering. General guidance, every figure linked to its source — so you buy because the numbers and the life add up, not because someone told you rent was dead money. See how Havenli works, read how Jordan builds her deposit through super, find out what she used to actually search, or start with how much deposit you really need.

This story is general information, not financial, legal or taxation advice — Jordan isn't a real person, her numbers are illustrative, and your circumstances will differ. Rents, interest rates, strata costs, property growth and transaction costs change and depend on your situation; always confirm the current details with the official sources linked above, and talk to a licensed professional for advice on yours.