The so-called price gap between house prices and rents is an indicator of how expensive it is to purchase a house with a standard mortgage versus average monthly rent.
According to research carried out by price comparison site Compare The Market, the average rent in Luxembourg for a three bedroom house is $3,017 (€2,634) per month, while the equivalent monthly mortgage payment is $4,558 (€3,980).
Knowledge Bites: Price, size, emissions, material deprivation - Housing in Luxembourg compared to EUSecond-placed Latvia, meanwhile, has a price gap of 42.5%, but both rent prices ($582 or €508 per month) and mortgages ($830 or €725 per month) are much lower.
In two OECD countries, average mortgage payments are lower than rents. Finland’s price gap is -2.1%, with average mortgage payments of $1,258 (€1,098) working out slightly less than average rent of $1,285 (€1,122). Italy also enjoys cheaper mortgage than rent prices, with the price gap calculated at -0.9%.
At around $4,558 (€3,980) a month, Luxembourg’s average monthly mortgage payments are far higher than the OECD average. Ranked in this way, second-placed Switzerland is at a far more affordable $2,961 (€2,586) per month.
Meanwhile, Luxembourg’s average is an eye-popping ten times higher than bottom-placed Turkey’s, at $441 (€385) per month.
Rents are similarly staggering, with the average three-bed costing $3,017 (€2,634) in the Grand Duchy, compared to $2,599 (€2,269) in second-placed Switzerland. Turkey is again the lowest in the OECD, at $372 (€324) per month.
How about something more affordable and close by? Both average rents and mortgages are much lower in the Grand Duchy’s neighbours - with Belgium proving on average the most affordable. Monthly rents there are $1,224 (€1,069) and mortgage payments $1,384 (€1,209).
| Rank | Country | Average rent $ (3 bedrooms) | Mortgage monthly payment $ (est.) | 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% |
