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Bene, 2points. Capital growth is one side of the equation.. Many are expecting rents to increase in the short term, which brings the gap closer. I'm not sure of the percentage of people that pay off their home in 10yrs.. I think it's better to consider the capital growth in 20.

actually a lot of the buyers costs i.e. rates, insurance, cost of maintenance, goes up with inflation too :(

Ok, lets assume the buyer doesn't make pincipal repayments.. lets calculate the term for the rent to catch up with the buyers repayments n = {\log(FV) - \log(PV)} / {\log(1 + i)} assuming rent goes up with inflation i = 3% FV = 865 PV = 480 n = 20years naturally there are a...

Even in the more "realistic" example - it's only for one year.. How about an example over the life of a loan? Rents go up while a buyer's loan stays the same.. so maybe after year 10 they are paying the same (sorry haven't modelled this).. and at the end of the loan, the buyer owns his house...