Thinking of trading the landlord’s spare key for your own set? Or wondering if it’s wiser to stay nimble and keep renting while the market digests higher interest rates? Let’s crunch the latest numbers—minus the jargon—so you can decide with confidence.
1. Snapshot: Where the market sits mid-2025
| Metric (latest released) | Illawarra | Sydney | National |
| Vacancy rate (May 2025) | 2.0% | 1.6% | 1.3% |
| Median house price (June 2025, Wollongong SA3) | $1.06 m | $1.20 m | $825 k |
| Median weekly rent – houses (June 2025, Wollongong city) | $690 | $750 | $617 |
| RBA cash rate (July 2025) | 3.85% (nationwide) | – | – |
Sources: REINSW Vacancy Report May-25; Realestate.com.au Wollongong suburb profile (June 2025); Realestate.com.au house-price page (June 2025); RBA cash-rate overview (July 2025). A note about vacancy rates: Rates vary depending on the report. For example, REINSW Illawarra region (May 2025) = 2.0%. For Wollongong LGA specifically, SQM Research shows vacancy below 1% in June 2025. For this article, we’ve assumed the higher percentage.
Take-away: Rents have climbed faster than prices over the past 12 months, while vacancies remain tight and borrowing costs are high—but no longer rising every meeting.
2. Cost of renting today
| Typical three-bed Wollongong house: $690 pw
| Annual outlay: ~$35,880 (ignoring utilities / minor tenant costs)
| Flex factor: You can leave with 21 days’ notice, no stamp duty, no rates, no maintenance headaches.
3. Cost of buying the same property
| Assumption | Figure |
| Purchase price | $1.06 m (Illawarra median) |
| Deposit | 20% ($212 k) |
| Loan | $848 k |
| Variable OO P&I rate | 5.90% p.a. (average major bank, July 2025) |
| Weekly repayment | ≈ $1,150 (30-yr term) |
| Other owner costs | Rates/insurance/repairs ≈ $120 pw |
Weekly “all-in” cost: ~$1,270 vs $690 rent. The ownership premium is roughly $580 a week—a tall order unless you’re banking on strong capital growth.
4. Five big levers that tip the scale
| Lever | Tilts toward | Why it matters in 2025 |
| Interest rates (cash rate 3.85%) | Rent | Mortgage costs still double 2021 levels. |
| Rental inflation (Illawarra +8% YoY) | Buy | Landlords can lift rents; tenants face compounding hikes. |
| Vacancy rate 2% | Buy | Tight supply means finding a good rental isn’t easy. |
| First-home buyer schemes (Help-to-Buy, stamp-duty swap) | Buy | Up to 40% equity share slashes required deposit. |
| Price growth outlook 0-4% | Neutral | Moderate gains unlikely to offset big interest bills fast. |
5. Investor angle: yield vs mortgage
| Median gross yield – houses:9%
| Interest on investor P&I loan: ~6.3% (July 2025)
| Net result: Most vanilla houses remain cash-flow negative unless you can push rent above $800 pw or add a granny flat.
6. When renting wins
| You’re saving aggressively for a 20% deposit to dodge LMI.
| Your stay is short (<3 yr) or job location uncertain.
| You value mobility more than nesting. Surf trip to Costa Rica, anyone?
7. When buying makes sense
| You’ve secured Help-to-Buy (2% deposit) or family equity.
| You plan a ≥ 7-year hold, giving time for equity build-up.
| You’re eyeing value-add suburbs: Dapto (median $765 k, yields 5.1%) or Berkeley ($710 k, yields 5.3%) where repayments vs rent gap narrows.
8. Action plan in two minutes
| Run the numbers: Use an online rent-vs-buy calculator at 5.9% interest.
| Stress-test: Add +1% to the rate; still sleep at night?
| Budget for the invisible: Rates, insurance, strata if a unit.
| Get pre-approval before spring – stock builds, competition spikes.
| Consider rent-vesting: Buy a smaller, higher-yield unit (< $550 k) and keep renting the beach pad.
9. The Verdict
For most households, the equation still favours renting in mid-2025, unless you can access a low-deposit scheme or find a sub-$800 k house with strong upside. Prices aren’t spiralling, but neither are they crashing. Buying now is less about timing the market and more about timing your life—career, kids, cash buffer.
Need a sounding board?
Dimosons crunches these numbers daily. Book a free 30-minute strategy call and walk away knowing exactly where you stand—no surfboard required.
Helpful links
Visit the links below for more info on leasing in NSW:
| Step-by-step guide to buying
| Step-by-step guide to leasing
| Why choose Dimosons
Similar Blogs
| Buying an investment property in Illawarra: Is now the right time?
