Countries with the biggest real estate gap between buying and renting

·2 min read
Real estate searchers need to decide between renting and buying. (Getty)
Real estate decisions can vary depening on where in the world you're buying or renting a home. (Getty)

Hot real estate markets are adding gasoline to the debate about buying versus renting a home.

There have been a number of attempts at crunching the numbers. Which one makes more sense can depend on where in the world you plan to live.

New research from Compare The Market looked at average house prices and rent in OECD countries to find out which countries have the biggest gap between mortgage payments versus renting.

Canada has one of the widest gaps between renting and buying. The report found mortgage payments are 32.6 per cent more expensive than rent for a three-bedroom home.

But there are nine countries with even larger gaps. Luxembourg has the biggest gap between mortgage and rent at 51.1 per cent, while also being the most expensive for both in the world.

"This means that, with an average rent of US$3,017, the average monthly mortgage payment is estimated at US$4,558," read the report.

"Luxembourg is renowned for its high cost of living, which is clearly reflected in the cost of property and rent."

Also See: The latest real estate news for housing prices, mortgage rates, markets, luxury properties and more at Yahoo Finance Canada.

Latvia has the second-largest gap at 42.5 per cent. However, prices for both are significantly lower. The average rent is only $582 a month and mortgage payments are $830.

Slovakia has the third-largest gap (42.3 per cent), in large part due to rising home prices. But each option is also similarly lower-priced with an average rent of $771 and mortgage payments of $1,098.

There are only two countries where buying is cheaper than renting. Average mortgage payments of $1,258 in Finland are 2.1 per cent cheaper than rent of $1,285.

The other is Italy. Mortgage payments of $997 are slightly lower (0.9 per cent) compared to rent of $1,006.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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