The 3 Core Variables
The rent-vs-buy decision turns on three variables:
- Rent yield: annual rent ÷ price — under 1.5% favors renting, above 3% favors buying
- Mortgage rate: LPR + spread
- Annual price growth: your 10-year expectation
Beijing, Shanghai, Shenzhen over 10 Years
Beijing: CNY 5M home, CNY 8,000/month rent — 1.92% yield
- Buying, 10-year cost: 1.5M down + 19K × 120 payments + 300K taxes = CNY 4.08M
- Renting, 10-year cost: 8K × 120 rent + returns on the spare CNY 3.5M = 960K + 600K = CNY 1.56M
- Renting saves CNY 2.52M
Shanghai and Shenzhen (also CNY 5M homes) tell the same story: in tier-1 cities, renting wins long-term.
The Tier-2 Twist
Chengdu / Wuhan / Xi'an: CNY 1.5M home, CNY 3,000/month — 2.4% yield
- Buying: 450K down + 5,700 × 120 + 50K taxes = CNY 1.18M
- Renting: 3K × 120 + returns on 1.05M = 360K + 250K = CNY 610K
- Renting still wins
Tier-3/4: CNY 800K home, CNY 2,000/month — 3% yield
- Buying: 240K down + 3K × 120 + 30K = CNY 630K
- Renting: 2K × 120 + returns on 560K = 240K + 130K = CNY 370K
- Renting still saves CNY 260K
The 3 Hidden Benefits of Buying
On pure math renting wins — but buying carries hidden value:
- Hukou & schooling: school access, medical and social insurance perks
- Inflation hedge: home prices track M2 long-term; rents may not
- Peace of mind: stable housing and freedom to renovate
💡 Skip the math — try the GFWPS tool:Rent vs Buy →