Buy vs rent + Borrowers keep repayments high + Domain tips growth
New data from Domain shows that while it’s still cheaper to rent in most parts of Australia, that may not be the case for long, especially for unit buyers and those eyeing regional areas..
Right now, only 6.0% of suburbs across the country offer cheaper mortgage repayments than rent for houses. But the picture is far more favourable for units: 22.8% of suburbs nationally, and a huge 31.3% in regional areas, make more financial sense to buy in than rent.
Perth leads the way in affordability. A remarkable 82.9% of its unit suburbs favour buyers, far ahead of Brisbane (7.9%) and Sydney (9.5%).
The report assumes a 20% deposit and an interest rate of 5.68%. But with two rate cuts already delivered in 2025 and further expected, Domain says more suburbs could soon tip in favour of buying.
Domain expects the biggest gains to be in unit-heavy capital city areas and regional towns, where mortgage costs are already close to rent.
However, this growing affordability may also bring a wave of buyer demand and renewed price growth.
Most borrowers sticking with higher repayments
New research from Commonwealth Bank (CBA) found most borrowers are sticking with higher repayments, despite two rate cuts this year.
CBA said that after the Reserve Bank of Australia’s May interest rate cut, only 10% of eligible customers reduced their mortgage repayments. That’s the same proportion as after the February cut, even though more borrowers qualified the second time around.
NSW borrowers were the most likely to adjust, with 13% of eligible customers making changes. Across the country, borrowers aged 31–50 were the most responsive, and investors were slightly more likely than owner-occupiers to reduce payments.
Those who did act could be saving around $160 per month on a $500,000 loan, according to CBA’s modelling. But most are choosing to keep their repayments high, a strategy that can help you get ahead on your mortgage.
Domain forecasts more growth, but tougher conditions
Domain’s latest forecast shows Australia’s housing market won’t be slowing anytime soon – despite affordability pressure and easing population growth.
Property prices are tipped to rise across the board in FY2026, with every capital city bar Canberra expected to reach record-high house prices.
Sydney is forecast to lead the way, with house prices set to jump 7% to $1.83 million, outpacing the average salary in the city. Melbourne is tipped to grow 6% to $1.1 million, while Brisbane (5%), Adelaide (4%), and Perth (5%) are also set to hit new highs.
Unit prices are also expected to rise, especially in cities where affordability constraints push more buyers toward apartments.
Domain’s Nicola Powell said the market remains sensitive to interest rate cuts, with lower rates likely to fuel further price growth.
“Growth will slow compared to past cycles,” she said. “But affordability is still a major barrier, with housing costs taking up a large chunk of household budgets.”
