Rent vs Buy Around the World: How Cities and Countries Compare
Short answer
Whether renting or buying wins depends heavily on where you live. Using our illustrative defaults, buying comes out ahead over 10 years in places like Ireland, the UK, Dubai, Portugal, Spain and Japan, where rents are high relative to prices or borrowing is cheap. Renting wins in Toronto, Sydney, Hong Kong, India, Brazil and much of North America, where prices are high relative to rents or rates are steep.
Key takeaways
- Price-to-rent ratios across our markets range from 12.5 (South Africa) to 40 (Switzerland).
- A low price-to-rent ratio is not enough on its own: high mortgage rates and investment returns can still make renting win, as in Brazil and South Africa.
- Comparing gross rental yield with the mortgage rate is a quick, useful first screen.
- Transaction costs, rent rules and expected price growth explain most of the remaining differences.
Is it better to rent or buy in different cities and countries?
Comparing rent vs buy by city shows that the answer depends more on local prices, rents and interest rates than on any universal rule. In our market presets, buying wins over 10 years where rental yields are high relative to mortgage rates, such as Ireland, the UK, Dubai, Portugal and Japan. Renting wins where homes are expensive relative to rents or borrowing is costly, such as Toronto, Sydney, Hong Kong, India and Brazil.
The figures below come from the default assumptions in our rent vs buy calculator, run over a 10-year horizon. They are illustrative starting points, not forecasts or official averages. Prices and rents vary widely within every country, so the useful lesson is the pattern, not any single figure.
Two numbers that explain most of the difference
The price-to-rent ratio is a home’s price divided by a year’s rent for a comparable home. A ratio of 20 means the home costs 20 years of rent. Higher ratios generally favour renting. Our price-to-rent ratio guide covers how to calculate it for a specific property.
Gross rental yield is the inverse: annual rent divided by price. A 5% yield means rent equals 5% of the home’s value each year.
The most revealing quick test is to compare gross yield with the mortgage rate. If rent is a bigger percentage of the price than the interest rate, renting is relatively expensive and buying tends to win. If the mortgage rate is higher than the yield, buying is costly relative to renting, and it needs strong price growth to compensate.
Global rent vs buy comparison by region
“10-year verdict” is which side has higher net worth after 10 years in our simulation. “Break-even year” is the first year buying pulls ahead, checked up to 30 years. Rents are monthly in local currency.
Americas
| Market | Home price | Monthly rent | Price-to-rent | Gross yield | Mortgage rate | Yield − rate | Buying costs | 10-year verdict | Break-even year |
|---|---|---|---|---|---|---|---|---|---|
| United States | USD 420,000 | 2,100 | 16.7 | 6.0% | 6.3% | −0.3 | 3% | Rent | Not within 30 years |
| Mexico | MXN 3,000,000 | 15,000 | 16.7 | 6.0% | 10.5% | −4.5 | 6% | Rent | Year 13 |
| New York City | USD 850,000 | 4,200 | 16.9 | 5.9% | 6.3% | −0.4 | 4% | Rent | Not within 30 years |
| Brazil | BRL 600,000 | 2,800 | 17.9 | 5.6% | 12% | −6.4 | 4% | Rent | Not within 30 years |
| Canada | CAD 700,000 | 2,300 | 25.4 | 3.9% | 4.4% | −0.5 | 2.5% | Rent | Not within 30 years |
| Toronto | CAD 1,050,000 | 2,700 | 32.4 | 3.1% | 4.4% | −1.3 | 4% | Rent | Not within 30 years |
Europe
| Market | Home price | Monthly rent | Price-to-rent | Gross yield | Mortgage rate | Yield − rate | Buying costs | 10-year verdict | Break-even year |
|---|---|---|---|---|---|---|---|---|---|
| Ireland | EUR 380,000 | 1,900 | 16.7 | 6.0% | 3.8% | +2.2 | 2.5% | Buy | Year 1 |
| United Kingdom | GBP 290,000 | 1,350 | 17.9 | 5.6% | 4.3% | +1.3 | 2.5% | Buy | Year 2 |
| Portugal | EUR 300,000 | 1,300 | 19.2 | 5.2% | 3.2% | +2.0 | 7% | Buy | Year 3 |
| Spain | EUR 280,000 | 1,200 | 19.4 | 5.1% | 2.9% | +2.2 | 11% | Buy | Year 5 |
| London | GBP 550,000 | 2,300 | 19.9 | 5.0% | 4.3% | +0.7 | 4% | Buy | Year 4 |
| Italy | EUR 230,000 | 850 | 22.5 | 4.4% | 3.3% | +1.1 | 5% | Rent | Year 15 |
| France | EUR 330,000 | 1,200 | 22.9 | 4.4% | 3.2% | +1.2 | 8% | Rent | Not within 30 years |
| Netherlands | EUR 470,000 | 1,700 | 23.0 | 4.3% | 3.8% | +0.5 | 3.5% | Buy | Year 2 |
| Germany | EUR 450,000 | 1,500 | 25.0 | 4.0% | 3.6% | +0.4 | 10% | Rent | Not within 30 years |
| Sweden | SEK 3,500,000 | 11,000 | 26.5 | 3.8% | 3% | +0.8 | 2% | Buy | Year 3 |
| Switzerland | CHF 1,200,000 | 2,500 | 40.0 | 2.5% | 1.6% | +0.9 | 3% | Buy | Year 9 |
Middle East and Africa
| Market | Home price | Monthly rent | Price-to-rent | Gross yield | Mortgage rate | Yield − rate | Buying costs | 10-year verdict | Break-even year |
|---|---|---|---|---|---|---|---|---|---|
| South Africa | ZAR 1,800,000 | 12,000 | 12.5 | 8.0% | 10.5% | −2.5 | 5% | Rent | Year 24 |
| UAE (Dubai) | AED 1,800,000 | 10,000 | 15.0 | 6.7% | 4.5% | +2.2 | 7% | Buy | Year 3 |
| Saudi Arabia | SAR 1,000,000 | 4,000 | 20.8 | 4.8% | 5.5% | −0.7 | 7.5% | Buy | Year 5 |
Asia-Pacific
| Market | Home price | Monthly rent | Price-to-rent | Gross yield | Mortgage rate | Yield − rate | Buying costs | 10-year verdict | Break-even year |
|---|---|---|---|---|---|---|---|---|---|
| Japan | JPY 55,000,000 | 220,000 | 20.8 | 4.8% | 1.1% | +3.7 | 7% | Buy | Year 6 |
| India | INR 8,000,000 | 30,000 | 22.2 | 4.5% | 8.5% | −4.0 | 7% | Rent | Not within 30 years |
| New Zealand | NZD 800,000 | 2,690 | 24.8 | 4.0% | 5% | −1.0 | 1% | Rent | Not within 30 years |
| Australia | AUD 900,000 | 2,800 | 26.8 | 3.7% | 5.6% | −1.9 | 4.5% | Buy | Year 8 |
| Singapore | SGD 1,500,000 | 4,500 | 27.8 | 3.6% | 2.8% | +0.8 | 3.5% | Buy | Year 4 |
| Hong Kong | HKD 8,000,000 | 20,000 | 33.3 | 3.0% | 3.5% | −0.5 | 5% | Rent | Not within 30 years |
| Sydney | AUD 1,450,000 | 3,460 | 34.9 | 2.9% | 5.6% | −2.7 | 5% | Rent | Not within 30 years |
Why does the answer differ so much between countries?
1. Interest rates relative to rents
The yield-minus-rate column predicts most verdicts. Japan, Ireland, Dubai, Spain and Portugal all have rents well above their mortgage rates, and all favour buying. Brazil, Mexico and India sit at the other extreme, where mortgages cost 4–6 percentage points more than the rental yield. That is also why a low price-to-rent ratio does not guarantee buying wins: South Africa has the lowest ratio in our set (12.5) but a 10.5% mortgage rate, so renting is ahead for over two decades. Our article on how interest rates affect rent vs buy shows this sensitivity in detail.
2. Investment returns available to renters
High-rate economies also tend to offer high returns on savings. In Brazil, with the Selic rate in double digits, our default after-tax return is 11%; in India, 10%. When a renter can earn that much on the deposit they did not spend, the bar for buying rises sharply. See the opportunity cost of a down payment for worked numbers.
3. Transaction costs
Buying costs range from about 1% in New Zealand (no stamp duty) to around 10% in Germany and 11% in Spain. High buying costs push the break-even point later, because they are lost on day one. Germany’s 4% yield and 3.6% rate look neutral, but 10% Kaufnebenkosten plus modest 2% price growth tip it to renting. Spain shows the opposite: costs are high, but a 2.2-point positive spread and 4% growth still let buying win by year 5.
4. Expected price growth
Appreciation assumptions differ, from 1% a year in Japan and Hong Kong to 6–7% in India, Brazil and Mexico. Higher growth helps buyers, but in our defaults it is usually paired with high rates, so it rarely decides the result alone. Australia is the exception: a 5% growth assumption is what lifts it to buying by year 8 despite a negative spread.
5. Leverage and deposit rules
Small deposits magnify price growth. Ireland and the UK default to 10% deposits, so a 3–5% rise in the home’s value is a 30–50% return on the owner’s equity before costs. Hong Kong defaults to 30% down and Singapore to 25%, which dampens that effect.
6. Renting culture and tenant protection
Where renting is secure and long-term, people feel less pressure to buy. Germany and Switzerland have long traditions of lifetime renting with strong tenant protections and some of the lowest home-ownership rates in Europe. Rent rules also shape the numbers: Dubai links rent increases to an official index, Riyadh introduced a multi-year rent freeze in 2025, and Stockholm’s regulated first-hand contracts are famously hard to get, pushing many people into buying cooperative apartments.
How to use this comparison
- Find the closest market in our country hub, such as the United States, Australia or UAE.
- Replace the defaults with the price and rent of an actual home and a real mortgage quote.
- Check the spread between gross yield and your mortgage rate as a first signal.
- Set your true horizon. Moving within five years favours renting almost everywhere.
- Stress-test growth at 1–2 percentage points below the default.
If you are moving between countries, run both locations: the right choice in Dublin might be the wrong one in Toronto. This is general information, not financial advice.
Run your own numbers
Every rule of thumb above depends on your rent, price, rate and how long you stay. Use the Rent vs Buy Calculator by Country below — it starts with local defaults you can change.