PHOTO: NZ housing affordability is an absolute disgrace. FILE
The research by Compare The Market analysed average house and rent prices in OECD countries to reveal the countries which have the biggest price gap between rent and house prices.
The 10 countries which the biggest gap between house prices and rent:
Rank | Country | Average rent (three bedrooms) | Estimated monthly mortgage payment | Difference between house prices and rent |
1 | Luxembourg | $3,017 | $4,558 | 51.1% |
2 | Latvia | $582 | $830 | 42.5% |
3 | Slovakia | $771 | $1,098 | 42.3% |
4 | Portugal | $1,005 | $1,419 | 41.2% |
5 | Hungary | $583 | $822 | 40.9% |
6 | Russia | $746 | $1,045 | 40.1% |
7 | Czech Republic | $861 | $1,205 | 40.0% |
8 | New Zealand | $1,656 | $2,234 | 34.9% |
9 | Germany | $1,414 | $1,887 | 33.5% |
10 | Canada | $1,597 | $2,118 | 32.6% |
Luxembourg ranked highest with a staggering price gap of 51.1%, reflecting the high cost of living. Luxembourg also has the highest rent and house prices on average with rent costing $3,017 a month, paired with a steep estimated monthly mortgage payment of $4,558.
Latvia came second place with a substantial gap between rent and house prices of 42.5%. While house prices in Latvia are much cheaper than those in Luxembourg, it has a similarly high gap between the cost of renting and buying. This means that, with an average monthly rent of US$582, average monthly mortgage payments are estimated at around US$830.
Slovakia comes in third with a 42.3% difference, just behind that of Latvia. House prices have been on the rise in Slovakia over the last few years and with an average rent of US$771, the average monthly mortgage payment is estimated at just over US$1,000.
Further insights:
On the opposite end of the scale, South Africa held a 0.8% price difference with rent prices averaging at $865 and the average mortgage payment being $872.
Two countries also held negative price difference percentages, with Finland and Italy having cheaper house prices overall than rent.
To read the full study, please click here.
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