Is it better to buy a house or invest in Australia?

It depends on your time horizon, location, and investment strategy. Over 20+ years in a growing suburb, property often wins due to leverage (you borrow 80% of the value) and the CGT exemption on your primary residence. Over shorter periods or in flat markets, a diversified portfolio of ETFs and shares can outperform because there are no stamp duty or maintenance costs. The key is comparing like-for-like: if you rent instead of buying, you should invest the difference between your rent and what a mortgage would cost.

How much does stamp duty cost when buying a house in Australia?

Stamp duty varies by state and property value. In NSW, stamp duty on a $750,000 property is approximately $28,000 for an existing buyer, but first home buyers pay $0 (full exemption up to $800,000). In VIC, the same property attracts around $40,000 in duty. First home buyer concessions differ by state. Stamp duty is a significant upfront cost that the 'rent and invest' alternative avoids entirely.

What returns can I expect from Australian shares vs property?

Over the long run, Australian shares (ASX200) have returned approximately 7-8% per annum including dividends, while capital city property has grown around 5-6% per annum in blue-chip suburbs and 3-4% in regional areas (CoreLogic data). However, property returns are amplified by leverage — if you put down 20% and the property grows 5%, your equity return on cash invested is much higher. Shares are more liquid and have lower transaction costs but don't benefit from the same leverage or CGT exemption that a primary residence offers.

Buy a House or Invest?

Should you buy property or rent and invest the difference in shares, ETFs, gold, or crypto? Enter your numbers — every assumption is editable so you own the result, not us.

Last verified: 1 July 2025

Time horizon*

years

How many years to compare.

Annual income*

For calculating CGT at your marginal rate.

State*

Determines stamp duty.

Property

Property price*

Deposit*

Loan interest rate*

Variable or fixed rate.

Loan term*

years

First home buyer?

Yes

Will you live in it?

Yes (PPR)

No CGT when you sell

No (investment)

CGT applies at sale

Suburb growth type

Default growth: 5% p.a.

Rates + insurance

% p.a.

Of property value.

Maintenance

% p.a.

Of property value.

Selling costs

Agent + marketing.

Rent (if you don't buy)

Weekly rent*

Rent for a similar property.

Annual rent increase

AU avg ~3.5% p.a.

Investment portfolio (alternative to buying)

Asset classAlloc %Return %

Australian shares (ASX)

International shares

Bonds

Gold

Cash / HISA

Crypto

Total: 100%Weighted return: 6.70% p.a.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

From the Mate Network

Calculate Your Take Home Pay →

Know your after-tax income before deciding how much to invest or borrow.

Buy a House or Invest?

Property

Rent (if you don't buy)

Investment portfolio (alternative to buying)

Related reading

Related Tools

From the Mate Network