[abelaer]

Isn’t it agreed upon that the Gini coefficient is misleading though? According to it, the worst inequality can be found in the Netherlands and the Scandinavian countries, just because borrowing money for a house is cheap and safe.

[jusssi]

There's a big divide between those who can get a mortgage, and those who can't.

When you buy, pay the maintenance expenses, and for a limited time (well, not Sweden, what they do is essentially renting from a bank) you pay back the loan to the bank and interest for it.

When you rent (because you don't have enough income to get a loan big enough, or have otherwise messed up your finances), you pay the maintenance expenses, and the owner's loan and interest (and after the loan is paid, profit for the owner's investment forever after), and their taxes.

Also, it's only cheap right now with the record low interests for the last 10 years, and it's only safe in specific locations where (and when) the demand for housing is stable or increasing and prices increase over the rate of inflation.

[abelaer]

Sure, I'm not saying the housing market is in an especially healthy position, just that the Gini index measures the wrong thing. Its increase alarms people, but it just puts you higher on a list with relatively very equal social democracies at the top. They go into some more detail here: https://www.youtube.com/watch?v=Ot4qdCs54ZE

Note that I'm also not arguing that a large Gini index is good, it just measures something very specific that doesn't really say a lot about inequality.

[refurb]

Renting is often cheaper in major cities.

[jusssi]

The owners generally want profit, where does it come from?

[nicolas_t]

I can speak for Hong Kong, the return on investment on a rental property is around 2.5% (in the case of the apartment I rent it's 2.6%). The reason why rent is so cheap is I believe due to a lot of speculation by people buying in the hope that the price will increase. But this creates a lot of landlords who want to rent and unfortunately for those renters the people renting can only pay so much a month.

Landlords still expect to make a profit with the rising prices though so think that the rent being this low is not an issue but between the NSL and the changes by mainland China, it's unlikely their bet will pay off

I've seen a similar situation in Malaysia where there's a massive amount of speculative investments in luxury condos leading to 38% of the luxury condos being empty. The landlords are just buying it for speculation they don't expect to make money with rentals and that drives the prices of rentals down

[refurb]

Two things I’ve noticed:

1. Price speculation. Owners are willing to take a loss each month assuming they will make it up on appreciation. This is very true for condos in Toronto for example. Rent is about $500-1000/month less than carrying costs of ownership.

2. Long-term ownership. Landlord bought the property for half the current market rate so carrying costs are way lower than if you’d bought today.