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Comment by jbarham | Hacker News Reader

This calculator ignores the fact that the market for real estate buyers is increasingly global but the rental market is local.

If you are in your 20's and grew up in a middle class family in Vancouver, Toronto, Sydney, Melbourne or Auckland, and have a middle class job, it is virtually impossible for you to be able to afford to buy a house in the city in which you grew up. E.g., here's a New Yorker article on the impact of the global property market in Vancouver: http://www.newyorker.com/talk/financial/2014/05/26/140526ta_....

The political fallout from the intergenerational inequality over property ownership in Canada, Australia and NZ is going to be very interesting to watch...

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> This calculator ignores the fact that the market for real estate buyers is increasingly global but the rental market is local.

How is the calculator ignoring this fact? If you think that increasing globalness will cause home price growth to be higher than inflation/rent growth, you can modify that parameter.

My point is that for young people who grew up in cities like London or Vancouver, the choice is not buy or rent, the choice is rent or move away from the city they grew up in if they want to be able to buy a house on a middle class salary.

Are you restricting rent to "living with roommates"? And not allowing for owning to be "rent out to others"?

In San Francisco, owning is incredibly expensive. But so is renting an equivalent piece of property. So I'm not grasping why the options are limited to rent or "move away". (aside from exceptions such as renting under rent control)

The rents in London are depressed by foreign investors who buy up properties and rent them out. This reduces the supply of properties to buy, and increases the supply of properties to rent.

Right so the calculator will tell you that it is better to rent if you believe the foreign investors are over-optimistic about future home price increases.

(Or alternatively, you don't yet have enough saved for a down payment. In that case, wait a few years and run this calculation again. If you still won't have enough money in a few years, your rent is too high for your income)

The choice is still or rent. What you're saying is that renting is better than buying in these cities because housing prices are high. This calculator demonstrates this; if you put in an extremely high house price, you'll find that renting is better (or moving somewhere else where housing prices are cheaper of course).

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