According to Cotality’s latest Monthly Housing Chart Pack, mortgage repayments on median‑priced units in several inner‑city markets now match or even beat the corresponding rent prices.
Inner Melbourne is currently the standout example. The report estimates mortgage repayments on a typical unit are around $322 per month lower than the area’s median rent.
Pockets of inner‑city Darwin and Canberra’s Woden Valley are also approaching rent‑buy parity.
Cotality head of research Gerard Burg attributes the shift to the widening divergence between rental inflation and unit value growth.
“Rents have surged 5.5% over the past year to February, supported by a 1.5% vacancy rate,” Mr Burg said.
Source: Cotality Monthly Housing Chart Pack, March 2026
Meanwhile new supply coming online has kept a lid on unit prices.
“When rents rise faster than property values, the cost gap between renting and buying naturally narrows.”
Cotality’s modelling assumes a 20% deposit on a 30‑year loan at a 5.75% mortgage rate.
Affordability trends steer demand toward units
Cotality’s data also confirms the most affordable segment of the market has recorded the strongest capital gains over the past year.
Lower‑priced dwellings have risen 11.5%, compared to 6.6% growth among higher‑value properties.
For investors, this indicates two important dynamics.
First, entry-level stock is attracting heavier buyer competition, reflecting strong demand from both first‑home buyers and yield‑driven investors.
Second, capital growth momentum is strongest at the lower end, where affordability barriers still allow for broader participation.
Burg notes that this competitive pressure is reinforcing value uplift in cheaper segments, while premium price brackets are experiencing a more subdued demand profile.
Worth noting, however, is that the rent‑buy convergence is currently limited to specific apartment markets.
Detached houses in all capital cities still favour renting over buying from a monthly cost perspective.
Ownership carries additional costs (but also wealth advantages)
While unit mortgage repayments may be tracking below equivalent rents in select locations, Cotality cautions aspiring property owners to account for the full ownership cost stack: body corporate fees, insurance, maintenance, and upfront capital requirements.
However, the long‑term wealth implications remain a compelling counterweight.
Mr Burg emphasises renters miss out on the equity gains, with Australian home values jumping nearly 44% over the past five years, adding roughly $280,000 to the median dwelling price.
Image by Marlene Celine Nordvik on Unsplash
