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When is it better to rent and when is better buy in a certain property market?
For US punters, the Centre for Economic and Policy Research has a Housing Cost Calculator you can play with.  The BBC provides this one for the UK. For everyone else, there are a few rules of thumb (use with discretion and only as a ball-park guide): Your example of a Gross Rental Yield of 5% would have to be weighed up against local investment returns. Read Wikipedia's comprehensive "Real-estate bubble" article. Update: spotted that Fennec included this link at the NY Times which contains a Buy or Rent Calculator.