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As housing affordability challenges continue to place strain on Aussie borrowers, industry experts are witnessing a rising popularity in rentvesting.
Ariza Buyers Agency director Adeal Rizvi said that rentvesting is increasingly seen as a financial strategy, not a “fallback option.”
“First home buyers today have more information at their fingertips than ever before. They know which areas offer strong rental demand and capital growth, even if they are outside their own city. It’s no longer a guessing game,” Rizvi said.
“First home buyers are starting to see property not just as a place to live, but as a way to build long-term wealth.”
Renting in attractive areas is proving to be far cheaper than mortgage repayments would cost for a property. This isn’t even factoring in the deposit needed.
Rizvi said that people who are paying $800–$900 per week in rent in some Sydney suburbs would be looking at weekly repayments of $1,700 or more for similar properties.
“Instead of compromising on location, they choose to rent where they want to live and buy an investment property elsewhere,” he said.
Rizvi’s perceptions on rentvesting mirror those of Ravi Sharma, founder of Search Property and author of Retire Filthy Rich with Real Estate.
He said the phenomenon is likely to continue and suggested it could become the “default strategy” for investors.
“Rentvesting has gained popularity because it allows Australians to maintain the lifestyle they want; often close to work, cafes, and social hubs, while still getting a foot on the property ladder. It’s a strategy that focuses on buying with numbers rather than emotions,” said Sharma.
“Focusing on areas that have good growth potential and [are] affordable in line with your strategy while living in the area you desire by renting. With rising property prices in major cities, many are finding it financially smarter to rent in desirable areas and invest in high-growth locations elsewhere. It’s about being strategic, not emotional, when building long-term wealth.”
These opinions are backed by data, with one study saying there has been a 21.4 per cent increase in rentvesting.
The investment strategy is growing two times faster than owner-occupier loans. Meanwhile, a survey found that 54 per cent of first home buyers would consider rentvesting, up 4 per cent from 2024.
These trends may only climb as interest rate cuts spur lending activity.
While the February rate didn’t provide too much relief to borrowers and mortgage holders, the mindset shift had an impact.
Recent data from HIA revealed that new home sales rose by 16.5 per cent in the month of April, the highest in 12 months.
“This rise arose likely as a result of the rate cut in February 2025, the first one in over four years,” said HIA economist Maurice Tapang.
“With another rate cut having been delivered in May and expectations of further cuts on the horizon, it would not be surprising to see increases in new home sales in the months ahead.”
[Related: Rentvesting to become ‘default strategy’ for investors]
