THE LONG VIEW
Rent or buy over time
How property equity and invested savings could diverge under your own assumptions.
Starting amounts and rates are illustrative assumptions, not city market data or lender quotes. Edit them for your circumstances. All results are in AUD.
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Buy path is higher at year 10 in this scenario
After 10 years, buying leaves you $96K ahead. Buy equity first exceeds the renter portfolio in year 4.
Net Wealth Over Time
Property equity (buy) vs invested capital (rent) · includes stamp duty, running costs, opportunity cost
Buy pathRent path
Stamp duty
$35,000
estimate
Mortgage /mo
$3,792
6.5% · 30yr
Buy wealth yr 10
$713K
property equity
Rent wealth yr 10
$617K
invested capital
Buyer — yr 1 costs
Mortgage repayments$45,509/yr
Duty allowance (upfront)$35,000
Running costs$8,000/yr
Total yr 1$88,509
Renter — yr 1 costs
Weekly rent × 52$31,200/yr
No purchase duty—
No running costs—
Total yr 1$31,200
Year 1 cash difference
Buy yr 1 total$88,509
Rent yr 1 total$31,200
Renter saves$57,309
Buy path: property grows at 5.0% p.a., running costs $8,000/yr. Rent path: rent grows at 3.0% p.a., deposit + stamp duty invested at 7.0% p.a. (your assumption). This model assumes property is held and the renter invests the annual ownership-minus-rent cost difference at year end. A negative portfolio represents a funding shortfall and is compounded at the same assumed return. Selling costs, investment fees, tax and other acquisition costs are excluded. Illustrative only — not financial advice. Consult a licensed financial planner.