Australian platform aims to take deposit barrier out of home ownership equation for struggling renters

House prices might be falling but Australians looking to escape the rental race still face years of saving before they have enough for a down payment on a home.

The national median rental price climbed almost 6 per cent in the year to June — reaching a record $705 a week — and ABS data shows inflation is outpacing wage growth, heaping extra pressure on savers in a cost-of-living crisis.

Sydney-based proptech outfit Coposit believes it will deliver Australian tenants a viable rent to buy solution in October that will “redirect” weekly rental payments towards a home deposit.

Unrent is aimed at people who can manage weekly housing costs but have not yet saved enough for a property to call their own.

“Renters are not failing because they cannot handle a weekly housing payment — they are already doing this by paying rent,” Coposit chief executive Chris Ferris said.

“Many are failing because the deposit keeps moving further out of reach while they keep paying rent.”

How Unrent works

Eligible buyers can move into a new property and put the rental payments that accumulate in the first year towards a deposit for the purchase.

Coposit said its property specialists will work with participants to understand their circumstances and housing needs, before eligible customers are referred through the appropriate finance process to ensure the purchase is viable.

“Once finance (is) approved and they have found their new home, the buyer makes an upfront payment, which varies depending on their individual circumstances and the property,” Ferris said.

The company said the upfront payment is “not a fee” but is used to lock in the deal, and goes 100 per cent towards the deposit and future ownership.

When finance is approved and a contract is in place, buyers can move into the property immediately.

The aim is for weekly rent payments to be “broadly aligned with what the buyer’s mortgage repayment would look like at the point of settlement”.

“The arrangement runs for approximately 12 months, during which 100 per cent of their weekly payments accumulate towards the deposit,” Ferris said.

“At the end of that period, they complete the purchase, obtain finance and settle their property.”

The buyer is free to choose a preferred lender and finance arrangement for settlement.

“During that 12 month (rental) period, the property partner remains the legal owner and is responsible for the costs associated with ownership, including council rates, maintenance and strata fees,” Ferris said.

Ferris said Unrent customers enter a contract for sale, not a traditional lease, ”so the purchase price is agreed upfront, locked in and does not change”.

“That gives the buyer certainty about the price of the home they are working towards purchasing,” he said.

What can people move into?

Coposit said interest in its housing-access product was high, with more than 1500 Australians joining a waitlist ahead of its launch in October.

“The properties will include new apartments, homes and townhouses,” Ferris told 7NEWS.com.au, with Coposit close to announcing locations across Sydney, Newcastle and the ACT.

At this stage the available dwellings are primarily leftover stock from completed developments.

Coposit will receive a fee from developers and property partners when a home is sold through the platform, “which allows us to keep the pathway free for buyers”.

About eight millions Australians across three million households currently rent in Australia.

“Our ambition is to help as many of those renters as possible who are capable of making weekly housing payments but are being held back by the deposit hurdle,” Ferris said.

“We’ll continue expanding in waves, bringing more properties and locations onto the platform as demand grows.”

Financial strategist Wayne Bemet said the current economic backdrop is “precisely why these products are landing right now”.

“Three rate rises this year haven’t just increased repayments — they’ve cut borrowing capacity by tens of thousands of dollars per hike, and inflation is eating whatever savings margin renters had left,” Bemet, founder of National Service Financial, told 7NEWS.com.au.

“The maths of ‘save a deposit while renting’ has gone from hard to nearly impossible for a lot of households: rents, energy and fuel are all running ahead of wage growth, so the savings rate that mattered has collapsed.”

Speaking generally, Bemet said there are genuine advantages of “rent-to-buy” avenues, including being able to get into a property quickly and having weekly payments work “toward ownership rather than building your landlord’s equity”.

“The purchase price is typically locked, which imposes certainty and forced savings discipline,” Bemet said.

“For someone with solid income but no capital — which describes a lot of younger Australians, including plenty of the veterans I work with — it can genuinely compress the timeline to ownership.”

Rent to buy regulations vary in each state, with Victoria banning agreements due to concerns that low income earners could be exploited.

Higher rental payments and inflated purchase prises, the potential to forfeit the home and your invested money if you can’t secure a mortgage at the end of the rental period, and fewer legal protections are often highlighted among the downsides of these schemes.

“Rent-to-buy schemes should be approached with extreme caution and an armful of legal and financial advice because if a buyer misses a payment or if a bank refuses to grant them a mortgage at the end of the lease term, the consequences can potentially be dire, although the exact outcome will vary from scheme-to-scheme,” Canstar data insights director Sally Tindall told 7NEWS.com.au. 

Bemet said risks are “chronically overlooked” when the focus is on getting in the new front door.

“You still have to qualify for a mortgage at the end of the accumulation period — roughly a year away. Nobody can tell you where rates will be in twelve months,” he said.

“Banks assess you at the actual rate plus a 3 per cent serviceability buffer, so a borrower who scrapes through today might not qualify at all after one more hike — or after their hours are cut in a slowing labour market.

“You’re taking twelve months of rate risk, employment risk and credit-policy risk with no guarantee at the other end.”

Locked prices ‘cuts both ways’

Bemet said the locked price “cuts both ways” too.

“In a rising market, a locked price is protection,” he said.

“In a weakening market, you can end up contracted to buy at yesterday’s price while the bank values the property at today’s — and a valuation shortfall means finding the gap in cash, or the deal collapses.

“That is not a theoretical risk in 2026; it’s the live one.”

Bemet said buyers should consider an independent valuation because some schemes hide their fee in above-market purchase prices and rent.

How rent to buy stacks up against other schemes

Experts say there are various assistance schemes for people looking to land a property and acknowledge that the landscape has shifted in the last 12 months, a period that has included the launch of the government’s low-deposit Help to Buy program and an expansion of its Home Guarantee Scheme.

“When rates were 2 per cent, the deposit was the wall. At 4.35 per cent, serviceability is the wall too — and a shared equity scheme that shrinks your mortgage attacks both,” Bemet said.

“Rent-to-buy only attacks one. Rent-to-buy is for the gap the government schemes don’t cover.”

Tindall said house hunters should canvass all options.

“Anyone entering into a home buying scheme, whether it’s one run by a state or federal government, or a private entity should read the fine print extremely carefully, get legal and financial advice and war game what might happen to your finances and the property under a range of different circumstances,” she said.

All information in this article is general in nature and does not take into account your personal circumstances. You should always seek independent, professional financial advice from a licensed expert before making any financial decisions.