Unless subsidized or losing money, the rent is more than a mortgage payment would be. If we had low enough transaction costs it would be better if everyone just owned their homes via mortgage for even short time frames.
EDIT: just to add context - Israel had a huge challenge - it was created with the goal of being a home for every jew globally - and most have come - which lead for a huge demand for housing, for many poor people. And for the first decades of it's history it was mostly successful at that. And it didn't seem to inhibit growth or employment.
BTW, Singapore has an home ownership rate of 90%, so it seems like a big success.
That is demonstrably false. Renting is more than a mortgage interest payment would be. Unless you feel like you have some special knowledge about the local real estate market, your capital is likely better off in the stock market.
Rental real estate works on leverage to a greater degree than is possible with stocks. Most banks won't make loans to invest in the stock market. They will make loans for investment property. So if you have $100,000 you can buy maybe 4 or 5 $100,000 rental properties, and have your tenants pay off the loans. Not as likely that you can take $100,000 and buy $400,000 - $500,000 of stocks, at least not as an unsophisticated individual investor.
People generally don't buy houses in order to rent them. Usually houses are rented out when the owner is moving and decides to rent it out rather than sell, at which point the owner has a substantial amount of capital in the house.
You can have a 5:1 margin account, like the one you describe, as an individual investor: If you have 100K to put in a brokerage account with your own money, you definitely have enough money for a brokerage to let you do it. It's just that it requires attention, because with a 5:1 ratio, a 5% loss just became a 25% loss. Ignore the market in the wrong week(say, in early October 2008), and all your margins get called, and you are in deep trouble.
Still, if you have 5 $100K rental properties, and you aren't bleeding a lot of money for a company to take care of it all for you, chances are you are still paying quite a bit of attention to your apartments anyway.
As far as whether mortgages or rentals are more expensive, it completely depends on the local market and local laws: In a pro-renter environment, rental is more expensive, because nobody wants to rent apartments out: People would rather let apartments sit empty. In a pro owner environment, at a place losing population, renting might be cheaper.
Unless the rental unit is a standalone single family home (and sometimes even then), economies of scale in maintenance and upkeep result in those costs being cheaper to a landlord.
Downpayments required for loans with good terms have opportunity cost to the buyer. On average over the long term, it has been appropriate to assign that downpayment a discount rate which is a net negative against average market returns.
If realestate markets are stable or reasonably increasing, mortgages are safe. But renting reduces risk of being stuck in an upside down loan, and risk reduction has value.
Despite all of these factors, you're right that rent includes profit, so in many cases it's wiser to purchase. But it's not as globally true as the parent comment suggests. The best choice comes from a balanced assessment of a variety of factors.
1) You have to buy for resale, not to fit your budget best. People tend to want to max out their mortgages these days. And if you are trying to sell into a downturn, it can be a problem.
2) Fees at time of sale. 6% twice ( once at purchase, once at sale ) eats 12% for the life of the mortgage.