Buy a House or Invest? The Australian Decision in 2026

Property prices are at record highs in most capital cities. Interest rates are still above 6%. Meanwhile, the ASX 200 returned over 8% in the past year, US shares did even better, and gold hit all-time highs above $3,200 USD per ounce.

So the question is simple: if you have $100,000 saved, are you better off using it as a house deposit — or investing it and continuing to rent?

The honest answer is that it depends on a dozen variables that are different for every person. That's why we built the Buy a House or Invest calculator — so you can model your exact scenario with your numbers, not someone else's.

But here's what the data tells us when we run the most common scenarios.

Let's take a common scenario for a 30-year-old in Melbourne or Brisbane:

• Property: $600,000 house, 20% deposit ($120,000), 6.5% interest rate, 30-year loan
• Investment: Same $120,000 invested in a balanced portfolio (60% shares, 20% bonds, 20% other), renting at $500/week

After 10 years:

• Property buyer: House worth ~$1,075,000 (6% growth), remaining loan ~$400,000, net equity ~$675,000. Total cost paid: ~$365,000 in mortgage repayments + $30,000 in rates/maintenance + $25,000 stamp duty = $420,000
• Renter + investor: Portfolio worth ~$290,000 (7.5% return after fees), rent paid ~$310,000 (assuming 3% annual increases). Net position: $290,000 portfolio

In this scenario, the buyer is ahead by roughly $385,000 in net wealth — mostly because of leverage. The buyer controls a $600,000 asset with $120,000 down. That 5:1 leverage means a 6% property return becomes a 30% return on your deposit in year one.

But change the assumptions — lower property growth, higher rent savings invested, better share returns — and the gap narrows fast. That's why you need to run your own numbers.

Property doesn't always win. Here are the scenarios where investing comes out ahead:

• Low property growth areas: If property only grows at 3-4% (common in regional areas and outer suburbs), a growth-oriented share portfolio at 8-9% will overtake within 10-15 years
• High interest rates: At 7%+ mortgage rates, the interest cost eats into property returns significantly. A $600K loan at 7% costs $48,000 in interest in year one alone
• Short holding period: Stamp duty, legal fees, and agent commissions mean you need to hold a property for at least 5-7 years just to break even on transaction costs. If you might move in 3-4 years, investing is almost always better
• Cheap rent relative to property value: If your rent is well below what a mortgage on the same property would cost, you can invest the difference aggressively
• Tax advantages: Capital gains on your main home (PPOR) are tax-free, which helps property. But shares held over 12 months get a 50% CGT discount, and franking credits on Australian dividends can add 1-2% to effective returns

Most "rent vs buy" calculators online are too simple. They compare mortgage repayments to rent and call it a day. Here's what they miss:

• Opportunity cost: The deposit you lock up in a house could be compounding in the market. Our calculator accounts for this
• Ongoing property costs: Council rates ($1,500-$4,000/yr), insurance ($1,500-$3,000/yr), maintenance (typically 1% of property value per year), strata ($3,000-$8,000/yr for units). These add 1.5-3% to the true cost of ownership
• Stamp duty: In NSW, stamp duty on a $600K property is roughly $22,000. In Victoria it's about $31,000. That money is gone on day one. Our calculator uses real stamp duty rates for every state
• Rent increases vs rate changes: Rents typically increase 3-4% per year, but mortgage rates can swing dramatically. A variable rate mortgage is not a fixed cost
• Asset allocation matters: "Investing" could mean a savings account at 4% or a growth ETF at 10%. Our calculator lets you set exact allocations across shares, bonds, gold, and cash

We built the Buy a House or Invest calculator to handle all of this. Every assumption is editable — property growth rate, mortgage rate, rent, investment returns, fees, stamp duty. Change anything you want.

Here's the uncomfortable truth: whether to buy or invest isn't purely a financial decision. It's also about:

• Stability: Owning gives you security. No landlord can sell your home under you or jack up rent 20% in a year
• Forced savings: A mortgage forces you to build equity every month. Most people won't invest as disciplined as they think they will
• Flexibility: Renting lets you move easily for work, relationships, or lifestyle. Property ties you down
• Lifestyle: Owning lets you renovate, have pets, paint the walls. That has real value that doesn't show up in a calculator

The numbers matter, but they're not everything. Use our calculator to get the financial picture clear, then factor in the things spreadsheets can't measure.