Except owning a house costs way more than the mortgage itself, that renters dont pay. Taxes, maintenance and improvement costs, which are massive considering most people can only afford houses built in the 60-80s, and governments like Germany has strict regulations. Couple this with the risk of suddenly not be able to pay - you can sell, like if you want to break out of the inflexibility of living in one place, but then see your maintainer investments flow in most cases.
It depends on your local housing market, but for example in The Netherlands, there is enough demand for houses, whether to rent or to buy, that when you rent you do pay all of those taxes, maintenance, etc. It is just part of the rent.
I have a hard time understanding a market where landlords cannot recover the cost of those taxes, etc. How you you make money if you can't do that?
Then in The Netherlands, on average prices of houses go up. Fast enough even that for most people it is very hard to save enough money each year to even keep up with the housing prices.
Then we get to the point that with a mortgage, part you pay is interest, that money is lost, just like rent. But in part you repay the mortgage. That stays in your pocket. So even if the cost of renting is the same as the mortgage plus taxes and other costs, then the mortgage is still cheaper.
If you want to buy a house and you are currently renting then you are competing with people who see the value of their current house go up, and the part of the house that they own went up because they repaid part of the mortgage for some years. This makes it almost imposible to compete if you have been renting for a long time.
Obviously, there can be local market where the demand for houses is low enough, that renting a house can be attractive.
On buildings that you buy that are not fixer-uppers the average maintenance cost should not be more than 2% or so of the value of the home per year. There was a time that interest rates were lower than that but historically that's an aberration and some of those costs you'd have as a renter anyway, after all not all maintenance costs are borne by the owner, some are taken on by the tenant.
If a landlord bought a decade ago their carrying costs can be a fraction of what they would be today. So they can still cover costs at a rent level far lower than buying today.
And in HCOL places it’s not unusual for the landlord to not break even on a new purchase when you add up all the costs. Price appreciation (hopefully) makes up the difference.
Every house has maintenance costs and this is the experience of all my homeowner friends. Betting on rising property costs may reap this back, but seeng what you can get for the average european family with 2 kids (up to 450k) prepare some parts of your home to be a construction site for a good part of the next 10 years.
I've never heard of home maintenance budgets being more than, say, 10% of the cost of a mortgage, and usually you're advised to budget only a few percent. Obviously there are outliers like when you buy a run-down old ruin and have to do a complete period-correct refurbishment, but hopefully people know what they're getting into in those rare cases.
Doubtful. On our £250K house stripping out the old heating system and fitting a combi boiler cost £4K, which is about 2%. Rewiring the house was another £2K. A reminder that you claimed above "Except owning a house costs way more than the mortgage itself", so even if all this stuff costs 10%, it still vastly cheaper than the mortgage (even of just the mortgage interest).
