Buy or rent, what suits you?

The housing market has completely changed in recent years. For many young workers, buying a house nowadays feels almost unreachable. Where previous generations could buy a home relatively easily, it has become much more difficult for starters now. Less supply, higher prices and often fierce competition mean that the search for a house can cause a lot of stress. To understand why it feels this way, it helps to look back at the past.

Buying a house used to be much easier

About 40 years ago, the housing market looked completely different than it does now. The ratio between income and house prices was much more favorable.

A simple example:

Around the 1980s, you could buy a house in the Netherlands for about 100,000 guilders (approximately €45,000).
An average salary was around 2,000 guilders per month back then.

That meant a house cost about 4 to 5 times an annual income.

Compare that to now:

The average owner-occupied home in the Netherlands now costs around €400,000 or more
A starter often earns around €2,800 to €3,200 gross per month.

A house costs t nowadays often 8 to 10 times an annual income. And we haven't even talked about:

Overbidding
Stricter mortgage rules
Student debt that counts
Temporary contracts

Additionally, supply is limited. Many houses are sold before they even appear on Funda, and for popular properties, people regularly overbid by tens of thousands of euros. For many first-time buyers, this simply means: buying alone is almost impossible.

The pressure that renting would be "stupid"

At the same time, there's still a strong idea that renting is a bad choice.

You often hear statements like:

"Rent is money thrown away."
"With buying, you build wealth."
"You should buy something as soon as possible."

And honestly: there's a grain of truth in it. If you buy a house and its value increases, you do indeed build wealth. But the reality of renting nowadays is more complicated. Rental prices are high, but buying is simply not achievable for many people. If you're paying €1,200 to €1,600 in rent, for example, there's often little room left to save significantly. This can actually make it harder to ever buy a house. This creates a frustrating situation: you want to move forward, but the possibilities are limited.

When buying can be logical

A home purchase can be interesting when your situation is reasonably stable. For example, when:

you have a permanent contract
you have sufficient savings for a down payment
you expect to stay in the same place for at least 5 to 10 years to stay
the monthly costs of a mortgage are not much higher than renting

In such a situation, buying can be financially attractive. But that doesn't mean it's always the right choice.

When renting might actually be a better fit

Renting can actually be a logical choice when:

you're not yet sure where you want to live
your job or career might still change
you're still saving for a future home purchase
flexibility is important to you

Additionally, as a renter you have fewer worries about maintenance. Large costs like a new bathroom or roof are usually for the landlord. That provides peace of mind, especially if you're still in a phase where many things in your life are changing.

Small test: does renting or buying suit you better?

Answer the questions below honestly.

1. How stable is your financial situation?

0 = my income varies or is uncertain

1 = reasonably stable, but not certain yet

2 = stable income and contract

2. How long do you want to stay living in the same place?

0 = less than 3 years

1 = about 3–5 years

2 = longer than 5 years

3. Do you have savings for a house?

0 = hardly any savings

1 = a small buffer

2 = sufficient savings for costs and down payment

4. How important is flexibility for you?

0 = very important

1 = doesn't matter much to me

2 = not important

Score

0 – 3 points → Renting probably suits you better right now

You're probably still in a phase where flexibility is important or where your financial situation is still developing. Renting can then be a logical and safe choice.

4 – 6 points → Both options could work

You're in an intermediate phase. Depending on your financial possibilities, both renting and buying could suit you.

7 – 8 points → Buying could be interesting

You probably have sufficient stability and financial space to seriously look at buying a home.

Ultimately there is no "right" choice

It's often portrayed as if buying is always better than renting. But the reality is that the housing market has simply changed. What was normal 40 years ago, isn't anymore. Sometimes renting is simply the best step at this moment. Especially if you want to move out of your parents' house and aren't ready for a mortgage yet. Living with your parents has advantages. You can save money and have low costs, but as you get older it can also have more and more disadvantages. The most important thing is therefore not what others expect, but what works for you. Whether you rent, save or eventually buy: these are all ways to build your life. And in the current housing market there is no perfect route. There is only the route that best fits your situation.