Invest
The facts and falsehoods of ‘rent money is dead money’
The majority of Sydneysiders believe renting is a waste of cash, but research shows that property owners in popular suburbs may have been better off investing in other markets.
The facts and falsehoods of ‘rent money is dead money’
The majority of Sydneysiders believe renting is a waste of cash, but research shows that property owners in popular suburbs may have been better off investing in other markets.
According to research from EY, two out of three Sydney residents still believe that renting is a waste of money. This is despite it taking an average of nine years of saving to buy a home or seven years for an apartment in Sydney. These time frames are compounded by tougher access to finance in recent years.
Big buys, big losses
EY’s research showed that 62 per cent of people would be better off investing the capital in other assets and paying rent over the period of 1994 to 2017, rather than owning a home and having the applicable bills with home ownership.
For example, in the Sydney suburbs of North Sydney, Mosman and Leichhardt, renters beat owners 70 per cent of the time.
Quiet achievers
On the other side of the equation, those who bought in Marrickville, the CBD and Botany Bay beat those who are renting 67 per cent of the time over the same period.
The biggest gain came from home buyers in Woollahra who bought in 2007 and sold in 2017, as they would yield nearly $303,771 ahead of renters.
All things considered
These findings are not necessarily an absolute indication of whether renting or buying is the better option. Rather, they indicate that the popular adage, “rent money is dead money”, is not universally applicable.
“Ultimately, renting does not have to be an inferior housing choice. But policy settings, banking practices and social attitudes currently make ownership seem a more desirable option for people,” EY said.
“That bias has not only created anxiety amongst those unable to put up the growing starting capital to buy a house, but also a level of leverage in the household sector that could impact future financial stability in Australia, with the rush towards ownership heavily contributing to household indebtedness rising to nearly 200 per cent of disposable income.
“Supporting households to purchase, where renting might provide similar or better long-term wealth creation outcomes, without the accompanying mortgage stress, is something governments and banks can help change the narrative on.
“To do so, the conversation needs to shift from ‘how can we make homes more affordable to purchase’, to ‘how can we make more versions of housing arrangements affordable, appropriate and stable’.”
RELATED ARTICLES
About the author
About the author
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
Property
Scarcity premiums, squeezed yields: Australia’s housing bottleneck is rewriting investor strategy
Australia’s housing pipeline has thinned to a decade low, locking in a scarcity premium that narrows investor flexibility, compresses yields and extends hold periods. With only 172,000 dwellings ...Read more
Property
Australia’s housing bottleneck isn’t a demand problem — it’s a construction maths problem
The economics of building have broken for mainstream housing in Australia. Input costs, labour scarcity and approvals drag are collapsing project feasibility, tilting capital to luxury builds and ...Read more
Property
2026 property expansion? Why disciplined investors will wait — and where to play offence
A growing chorus of market practitioners is urging investors to pause portfolio expansion in 2026 as returns compress and policy settings tighten. The headline risk is less about price crashes and ...Read more
Property
Cost, red tape and capital: why Australia’s housing pipeline is shrinking — and how to rebuild it
Australia’s housing pipeline is being choked by a toxic mix of escalating input costs, regulatory drag and tighter finance. The result: mid-market projects stall while luxury builds proceed, pushing ...Read more
Property
Start 2026 strong: Turn property advice into a data-driven advantage
In 2026, property professionals who industrialise goal-setting and risk management with data and AI will capture outsized client value. The playbook is shifting from intuitive advice to measurable, ...Read more
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
Property
Scarcity premiums, squeezed yields: Australia’s housing bottleneck is rewriting investor strategy
Australia’s housing pipeline has thinned to a decade low, locking in a scarcity premium that narrows investor flexibility, compresses yields and extends hold periods. With only 172,000 dwellings ...Read more
Property
Australia’s housing bottleneck isn’t a demand problem — it’s a construction maths problem
The economics of building have broken for mainstream housing in Australia. Input costs, labour scarcity and approvals drag are collapsing project feasibility, tilting capital to luxury builds and ...Read more
Property
2026 property expansion? Why disciplined investors will wait — and where to play offence
A growing chorus of market practitioners is urging investors to pause portfolio expansion in 2026 as returns compress and policy settings tighten. The headline risk is less about price crashes and ...Read more
Property
Cost, red tape and capital: why Australia’s housing pipeline is shrinking — and how to rebuild it
Australia’s housing pipeline is being choked by a toxic mix of escalating input costs, regulatory drag and tighter finance. The result: mid-market projects stall while luxury builds proceed, pushing ...Read more
Property
Start 2026 strong: Turn property advice into a data-driven advantage
In 2026, property professionals who industrialise goal-setting and risk management with data and AI will capture outsized client value. The playbook is shifting from intuitive advice to measurable, ...Read more
