Renting in the East, Buying in the Inner South: the Real Numbers

You can rent in Sydney’s Eastern Suburbs and buy in the inner south (Green Square/Mascot) if your cashflow, buffers and borrowing power still work after APRA’s 3% serviceability buffer and realistic expenses. The core decision is whether the combined cost of Bondi/Bronte rent plus Mascot/Green Square loan, strata and holding costs is safer than simply buying once at a higher price in the east.

This walkthrough gives decision‑grade numbers you can sanity‑check in a week.

Comparing cashflow between renting in the east and owning in the inner south.

1. What “rent in the east, buy inner south” actually means

1.1 Strategy in one sentence

You keep living where you love (Bondi, Bronte, Coogee) and own where the numbers work (Mascot, Green Square, Rosebery). It’s a focused version of rentvesting, covered more broadly in /insights/rentvesting-path-to-owning-eastern-suburbs.

The key moving parts:

1. Eastern Suburbs rent (your lifestyle cost).
2. Inner‑south mortgage and holding costs.
3. Tax outcome (negative or positive gearing, plus any budget changes).
4. Buffers for interest rate and business income shocks.

1.2 Typical price and rent bands (illustrative only)

• 2‑bed Bondi/Coogee unit: $1.3m–$1.6m, rent $1,050–$1,300/week.
• 2‑bed Mascot/Green Square unit: $850k–$1.0m, rent $850–$1,000/week.

Lenders currently test your home loan at ~3% above the actual rate (APRA guideline), so even if you pay ~6% now, they’ll model ~9% for borrowing power.

For a fuller strategy view, see /insights/rent-in-east-buy-west-rentvesting-playbook.

2. Cashflow comparison: live Bondi, own Mascot vs own Bondi

Let’s compare two simplified options.

Assumptions (illustrative, not advice):

• Interest rate: 6.0% p.a. P&I, 30‑year term.
• Strata/other holding costs: $8,000 p.a. on each unit.
• No LMI and no major repairs (to keep it simple).

2.1 Example numbers

Option A – Rent in Bondi, buy in Mascot (Mascot as an investment):

• Bondi rent: $1,150/week ≈ $4,983/month.
• Buy Mascot unit for $900k at 80% LVR → $720k loan.
• Monthly P&I at 6%: ≈ $4,318.
• Mascot rent: $900/week ≈ $3,900/month.
• Mascot strata/expenses: $8,000 p.a. ≈ $667/month.

Mascot property cashflow (pre‑tax):

• Rent in: $3,900
• Less loan: -$4,318
• Less strata/other: -$667
• Net shortfall: ≈ -$1,085/month.

So your household outgoings are:

• Bondi rent: $4,983
• Mascot shortfall: $1,085
• Total (pre‑tax): $6,068/month.

Option B – Own Bondi, no Mascot:

• Buy Bondi unit for $1.3m at 80% LVR → $1.04m loan.
• Monthly P&I at 6%: ≈ $6,245.
• Strata/other: $8,000 p.a. ≈ $667/month.

Total owner‑occupier cost: ≈ $6,912/month.

2.2 Side‑by‑side table

On these assumptions, Option A is ~$850/month cheaper before tax.

Once you consider tax (if Mascot is negatively geared) and future tax settings, the gap may narrow or widen. As we covered in /insights/cashflow-modelling-real-world-numbers-geared-property, always model both pre‑tax and after‑tax cashflow.