Rentvesting A Growing Trend for Aspiring Homeowners in Australia

Rising Popularity of Rentvesting

The rising trend of renting Australian real estate is changing, making it an increasingly smart strategy for first-home buyers. This strategy may include buying an investment property and renting in a location that creates a higher current?standard to live, allowing buyers to gain equity and plan for homeownership. Based on data from Westpac’s annual Home Ownership Report 2025, rentvesting has seen 54% of first-home buyers consider this strategy, an increase of 4% from the previous?year.

Survey Insights

This was a survey of 2000 Australians aged?18 and above all over capital cities and regional parts of the country and it was conducted by Lonergan Research. According to the data, rentvesting is particularly widespread in New South Wales (61% of the?respondents) followed by Victoria (54%) and Queensland (52%).

Damien MacRae, Westpac’s managing director of mortgages, said the trend was indicative of a?strategic shift in buyer behaviour. “Our research highlights that 82 % of Australians would consider buying in an area they hadn’t originally planned to, as buyers’ expectations are adjusting?to the market,” MacRae said. This flexibility is particularly important in a market where housing prices in capital cities are quite often more expensive when you are making it difficult for?first-home buyers to enter their preferred market directly.

Growing Optimism Among Aspiring Home Buyers

From 10% in 2024 to 13% of respondents want to purchase a new house to reside in by the end of the year. This increase points to growing excitement among prospective homeowners despite continuous affordability constraints brought on by the high cost of real estate.?

Impact of Interest Rates

Going forward, Westpac’s senior economist Matthew Hassan expects that?any potential rate moves will have a big impact on aspiring buyers in 2025. “There is almost certainly?an interest rate effect at play here.” High rates, which scared buyers away last year, were an open question, but the?prospect of moving rates down has led to changes in how potential buyers are planning. For rentvestors, the potential rate moves bode well?too from an increased buying power perspective,” Hassan said.

Maintaining affordability and a healthy work-life?balance

The growth in rentvesting is also indicated by a recent CoreLogic survey which revealed first home buyers are increasingly interested in the concept due to affordability?pressures. Jonathan said: "Rentvesting is an effective strategy for?buyers that want to build solid equity in a more affordable property, but enjoy the lifestyle benefits of renting in a more desirable location.

As the Australian property market shifts, rentvesting has become an increasingly viable?and pragmatic option for first-home buyers. Homebuyers can buy investment properties in healthier markets and rent in desirable areas in the meantime, a way for them to build?equity and position themselves for homeownership down the road. These findings from Westpac and CoreLogic suggest rentvesting will become increasingly popular as people?face affordability challenges and put homeownership out of reach.

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