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The Shock of Sweden's Housing Market Is Hitting the Country's Currency

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Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#421

Post by eesmith »

staticelf wrote: post #419
pimmen wrote: post #411

Earlier quoted context omitted.

Fair enough, I’ll stop putting words in your mouth. SiemperVernes supplied stats that showed that the correlation goes from weak to non-existant when you look at the past three decades, despite the fact that the early 90s was record years of immigration. You said the correlation was clear and that you think it’s the main cause of rising housing prices, why do you think that? Is it only because of news stories that th…

I would gladly base my thoughts on data but unfortunately when it comes to immigration the government doesn't really publish/store any data of any negative effects immigration could have. I base my thoughts on the data that is available (which isn't much) and I still think it's different from the 90s because of the much higher number of people that came to Sweden in the last years. Basically no systems worked as you…

Even if you had this specific information, it wouldn't answer your question. It would mostly serve to re-enforce the beliefs you came in with, because you also need to look for other factors which might explain the housing increases.

For example, in another part of this thread I quoted a news article as saying "Prices have also been pushed up since a law change in 2013, allowing private individuals to charge tenants based on their mortgage costs rather than comparable rent prices in the neighbourhood." How much of an effect has this had in the rents in 2014-2016?

You appear to be young person, so you personally are likely in the same housing market at the refugees. This can make it seem particularly dire for you as most of the new housing being built is for a more expensive part of the market.

So, why is the new housing built for a more expensive part of the market?

Another factor which is harder to plan for and which affects the housing market is internal migration. Just like in the US, smaller towns and cities in Sweden are depopulating as people move to the bigger ones, where there is a stronger economy.

Was that planned for, and how much of effect has that had on housing prices in the big cities?

Furthermore, as https://www.thelocal.se/20170205/swedens-urban-rural-divide-... points out, "It is primarily young people leaving". This is again the population which is in the same housing market as most of the refugees.

Finally, here's a quote from an article from 2009 titled "Sweden risks facing severe labour shortages" / "Over the next ten years, the number of native-born Swedes of working age will decline by 100,000. Without more immigrants, we will be unable to sustain our welfare standards, writes Olle Wästberg, head of the Swedish Institute." https://www.thelocal.se/20091222/24004

> Almost all Swedish regions have set population targets that emphasise growth. The Greater Gothenburg area wants to have a population of 1.5 million in just ten years’ time. Stockholm wants to have 600,000 more inhabitants over the next 20 years.

Was enough housing built to meet the desired growth goals?

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#422

Post by pimmen »

staticelf wrote: post #419
pimmen wrote: post #411

Earlier quoted context omitted.

Fair enough, I’ll stop putting words in your mouth. SiemperVernes supplied stats that showed that the correlation goes from weak to non-existant when you look at the past three decades, despite the fact that the early 90s was record years of immigration. You said the correlation was clear and that you think it’s the main cause of rising housing prices, why do you think that? Is it only because of news stories that th…

I would gladly base my thoughts on data but unfortunately when it comes to immigration the government doesn't really publish/store any data of any negative effects immigration could have. I base my thoughts on the data that is available (which isn't much) and I still think it's different from the 90s because of the much higher number of people that came to Sweden in the last years. Basically no systems worked as you…

But there is data of how many refugees entered Sweden in the 90s, it was roughly a hundred thousand a year then just like in the recent years. Did you read any of the links SiemperVernes linked to? You also say that you don't believe refugees could cut the line to public housing, did you check at all to find out if that was the case? Did you also cross check with SCB to find out how many new houses were built, since that statistics stretches well past the Million program more than 50 years ago? It even stretches back before WWII.

https://www.scb.se/hitta-statistik/statistik-efter-amne/boen...

Or is your personal belief based on your gut feeling?

And, when you say that "they correlate well", what time period are you then looking at? And what data? Because immigration decreased in the mid 2000s while the housing prices increased. No offense, but it looks like your analytical method is "there's lots of newspaper articles about refugees these days, and lots of newspaper articles about rising housing prices, one of them must the main cause of the other". I might as well say "there's lots of articles about smartphones lately while the housing prices are increasing, maybe smartphones lets us live alone more effectively meaning that we take up more space when everyone gets their own apartment instead of a room mate".

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#423

Post by vasilipupkin »

littlestymaar wrote: post #413
vasilipupkin wrote: post #400

Earlier quoted context omitted.

Sorry, you are missing the point. A liquid secondary market is what enables the company to go public in the first place. There would be no initial sale of stock without it at all. In addition, liquid secondary market enables the company to incentivize its employees and undertake other financing activities, as well as gives value to its remaining treasury stock.

> A liquid secondary market is what enables the company to go public in the first place. Dividends enable the company to go public. The secondary market makes the stock liquid, which is convenient but not mandatory.

No. Growth companies may not pay dividends for years and still go public. Dividends are paid by private companies too. The only reason to go public is the liquidity

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#424

Post by imtringued »

badestrand wrote: post #346
littlestymaar wrote: post #340

Earlier quoted context omitted.

Direct reserve emission by the central bank. In practice, the central bank can just give some reserve to the governement account.

..or they can give it directly to people. There is an initiative for Europe that wants exactly that, Quantitive Easing for People. I love the idea and am sure it would do more for the economy than just pushing banks to lend more money.

The problem with this idea is that the central bank doesn't have a list of bank accounts for the entire population and even if they did not everyone has a bank account.

It's more likely that negative interest rates will be passed onto consumer bank accounts by elmininating cash.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#425

Post by phaemon »

rayiner wrote: post #135
phaemon wrote: post #104

Earlier quoted context omitted.

> Well, if you are increasing the population a lot But you aren't increasing the population "a lot", now are you? You linked to a graph that shows around 350,000 asylum seekers over 5 years. What percentage of Sweden's population is that?

It's over 3.5% of the total population, which is equivalent to the U.S. adding about a million people. Also note that they're going to be concentrated into relatively few urban areas, instead of being spread out over the entire country.

So, 3.5% over 5 years, is about 0.7% per year. And that's the main cause of the housing problem in Sweden? I'm very skeptical.

> note that they're going to be concentrated into relatively few urban areas

Well surely that's a more likely cause, right? Not the actual number, but how they're being distributed.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#426

Post by imtringued »

autokad wrote: post #383
opportune wrote: post #14

When will we learn that a "strong" housing market is not necessarily a good thing? High housing prices are great for those who already owned houses but terrible for everyone else (e.g. the entire generations born after prices became inflated). Not to mention people are greedy and will over leverage themselves when interest rates are good. No country should let the "landed gentry" hold them hostage over interest rates…

this is short sighted. while its 'nice' to buy when the housing market is going down, essentially what you are saying is that a house should not appreciate in value. but in reality, there is virtually no good reason to own a home unless its an appreciating asset. after owning a home, i have nightmares about water. that was before the city flooded my basement with 3 feet of water (destroyed my washer, dryer, furnace,…

I don't understand your argument. $11000 in repairs is basically nothing compared to the cost of a home which even in cheap cities will cost you at least $250000. If the prices double to $500000 then $11000 suddenly becomes such a tiny amount it's not even worth thinking about it.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#427

Post by bogomipz »

opportune wrote: post #238
bogomipz wrote: post #221

Earlier quoted context omitted.

>"No country should let the "landed gentry" hold them hostage over interest rates or tax policy so that their assets - many of which they do not even actually own - can appreciate." Can you elaborate on what you mean here? What would be examples of ways in which people who live in places with strong housing markets hold others hostage via interest rates or tax policy? What policies are the policies that accomplish th…

Sure, as a politician you shouldn't be favoring homeowners more than people who don't currently own a home / younger generations. Passing policies that increase home value necessarily makes it harder to own a home than before, and also raises rent prices. Homeowners essentially hold everyone else hostage because they are able to vote and youth/the unborn/many immigrants cannot. So politicians are highly incentivized…

>'The main way to increase home prices is to make the monthly payments lower than before, by either decreasing interest rates or extending the maximum mortgage loan length"

>"Regarding tax, if you let interest be deductible from your taxes, you are making mortgage payments even lower. Again, this raises home value because mortgage payments will again revert to what they were before."

But these two policies/practices also allow more people to become homeowners and part of the "landed gentry." Isn't this acceleration of home values a side effect of encouraging home ownership rather than a strategic attempt by the segment of homeowners to keep other's out? I think you are making this side effect out to be something conspiratorial and I just don't believe there is any such unified home-owner voting block.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#428

Post by mbesto »

romwell wrote: post #407
mbesto wrote: post #406

Earlier quoted context omitted.

Uh what? If I have a house and I sell it for $2M cash and then I buy a house for $1.6M, I now have $400k in cash and $1.6M in assets.

Because of the expenses (moving, taxes, fees, etc) amount to $400K, you've just spent a lot of effort to replace a more expensive property with cheaper and smaller one for no gain. Real-life numbers will differ, but that's roughly the point.

Right. See my point here about asset transfer fees and the idea of "gain" or "loss" to wealth: https://news.ycombinator.com/item?id=15708206

But there is a gain, you just turned an illiquid asset into a liquid asset. The fact that this exchange is even possible is why you are even able to say "its worth $2M" in the first place. If you couldn't turn an illiquid asset into a liquid asset it would be worth nothing, so you neither "gain" nor "lose". Would you rather have that scenario?

Lastly - if you see personal value in purchasing a smaller house, wouldn't you expect service providers (agents, movers, etc) to charge you for that value?

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#429

Post by mbesto »

bzbarsky wrote: post #414
mbesto wrote: post #406

Earlier quoted context omitted.

Uh what? If I have a house and I sell it for $2M cash and then I buy a house for $1.6M, I now have $400k in cash and $1.6M in assets.

If you sell a house for $2M cash and have to pay capital gains taxes, and then buy a house for $1.6M, you do not have $400k in cash afterward.

If you sell it after 2 years and it's your principal residence you do actually have $400k in cash...

https://ttlc.intuit.com/questions/3229450-sold-primary-house...

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#430

Post by autokad »

imtringued wrote: post #426
autokad wrote: post #383

Earlier quoted context omitted.

this is short sighted. while its 'nice' to buy when the housing market is going down, essentially what you are saying is that a house should not appreciate in value. but in reality, there is virtually no good reason to own a home unless its an appreciating asset. after owning a home, i have nightmares about water. that was before the city flooded my basement with 3 feet of water (destroyed my washer, dryer, furnace,…

I don't understand your argument. $11000 in repairs is basically nothing compared to the cost of a home which even in cheap cities will cost you at least $250000. If the prices double to $500000 then $11000 suddenly becomes such a tiny amount it's not even worth thinking about it.

i live in philadelphia, the median home value is around ~200k I think, but that doesnt really matter based on your comment. the ~11k$ was brought up to mention how that helps the economy. a lot of people were put to work just by me buying a home. it also misses the point that 11,000$ to burn on something that is not going up is a really bad decision.
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