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Home ownership is the West’s biggest economic-policy mistake

economist.com

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Re: Home ownership is the West’s biggest economic-policy mistake

#91

Post by sufehmi »

bovine3dom wrote: post #82
RcouF1uZ4gsC wrote: post #73

Earlier quoted context omitted.

Actually who you are born to is probably the number 1 driver of inequality. If you really wanted something more equitable, you would probably require that no children be raised by their parents and be turned over to a state run children's home at birth.

In practice, that's not so far from what schools do.

Yup, COVID-19 shows me something that I have suspected all along - a LOT of parents are not comfortable to be with their OWN children.

Because schools are closed, parents have to be with their children all the time

A lot of them are really, really stressed out because of this.

Which begs the question - why the fuck did you bother to have kids then?

Children are blessings from heaven. If they can not see it that way, then they should free themselves from that and chose not to have kids instead

Mind blowing

Re: Home ownership is the West’s biggest economic-policy mistake

#92

Post by ahD5zae7 »

bovine3dom wrote: post #77
Traster wrote: post #48

I don't think this article makes a logical argument at all. It says house ownership is bad because it gives people a vested interest in constraining the supply of housing. That's true but that's not a problem. If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply. I'm also not sure that reducing home ownership is a good idea - "let's make everyone poorer" doesn…

> If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply. Yes, but constraining the supply is done through political means: planning laws, green belts, individual objections to developments, voting etc. All of those in theory are based on "one man one vote", so if you concentrate ownership of supply you drastically reduce the number of votes it gets. > the middl…

> All of those in theory are based on "one man one vote", so if you concentrate ownership of supply you drastically reduce the number of votes it gets.

Well let's not forget lobbying, corruption (more important than lobbying in some parts of the world, e.g. my country) and the plain and simple fact that politicians are usually quite rich (in many countries, not all) and so will own and rent houses, while having great influence on local laws.

Re: Home ownership is the West’s biggest economic-policy mistake

#94

Post by WalterBright »

stepbeek wrote: post #53
WalterBright wrote: post #16

Earlier quoted context omitted.

> I agreee that speculation on property solely as an asset is an issue Speculation helps create a liquid market and stabilize prices.

The article lays out that Germany - a market where property isn't speculated on - has stable houseprices. This is in contrast to English-speaking countries where speculation has caused houseprices to grow beyond the reach of most millenials. It doesn't strike me that speculation has led to stable prices here.

What the article says about Germany:

"Most important, in a few places the rate of home ownership is low and no one bats an eyelid. It is just 50% in Germany, which has a rental sector that encourages long-term tenancies and provides clear and enforceable rights for renters. With ample supply and few tax breaks or subsidies for owner-occupiers, home ownership is far less alluring and the political clout of nimbys is muted. Despite strong recent growth in some cities, Germany’s real house prices are, on average, no higher than they were in 1980."

Nowhere does the article say that speculators are the cause of high prices. Speculators are the result of a rapidly changing market, not the cause.

Re: Home ownership is the West’s biggest economic-policy mistake

#95

Post by kumarvvr »

yrgulation wrote: post #78

Property ownership is bad. Rent for life, dont leave inheritance to your children so they can rent for life too. All you need in life is clothing, entertainment, a bit of travel to distract you from your tiny living space, maybe a gadget or two and of course onsite work. Oh and praise from you manager to add meaning to your daily grind. Or so “they” say while “they” amass thousands of properties and massive fortunes…

This. I'm from India, and the most important goal for any salaried person in India, is to own a piece of land. Maybe 150 - 200 square yards (decently sized to build a 3 bedroom house). And that land is not seen as an expense, but as an investment. An investment to be handed over to children.

And usually, families try to buy about 1 plot of land for each child typically.

I think that, no matter where you are in the world, land is an important asset. A place to live, a house to cover your head, reduces a lot of stress in life.

In India, there are three things considered first and foremost in life "Roti, Kapda Makaan".

Roti - Food Kapda - Clothing Makaaan - House.

Re: Home ownership is the West’s biggest economic-policy mistake

#96

Post by CalRobert »

Traster wrote: post #48

I don't think this article makes a logical argument at all. It says house ownership is bad because it gives people a vested interest in constraining the supply of housing. That's true but that's not a problem. If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply. I'm also not sure that reducing home ownership is a good idea - "let's make everyone poorer" doesn…

Conversely, people who used to be able to live in a flat are now unable to live in the area at all because we've outlawed building flats.

Similarly, regarding: "unviable for anyone to ever afford a 4 bed house" - it's not like areas that ban conversions to flats have cheap 4 bed houses. They have expensive 4 bed houses, often filled with 4-8 roommates who likely would prefer their own flat.

Re: Home ownership is the West’s biggest economic-policy mistake

#97

Post by NiceWayToDoIT »

Huge difference is that wealthy/landlords buy properties with debt and operate with cash-flow while for them liability creates wealth.

For working people properties on mortgage are just expense.

https://www.singsaver.com.sg/blog/robert-kiyosaki-advice-on-...

Re: Home ownership is the West’s biggest economic-policy mistake

#98

Post by WalterBright »

pjc50 wrote: post #90
WalterBright wrote: post #16

Earlier quoted context omitted.

> I agreee that speculation on property solely as an asset is an issue Speculation helps create a liquid market and stabilize prices.

That's "market making". Speculation tends to increase volatility.

> Speculation tends to increase volatility.

Speculators make money off of prices deviating from the norm (i.e. volatility) and every time they make money off of a price difference, it pushes that price back to the norm. I.e. it decreases volatility.

The fact that speculators are attracted to volatility is an effect of volatility, not a cause.

Re: Home ownership is the West’s biggest economic-policy mistake

#99

Post by CalRobert »

sufehmi wrote: post #91
bovine3dom wrote: post #82

Earlier quoted context omitted.

In practice, that's not so far from what schools do.

Yup, COVID-19 shows me something that I have suspected all along - a LOT of parents are not comfortable to be with their OWN children. Because schools are closed, parents have to be with their children all the time A lot of them are really, really stressed out because of this. Which begs the question - why the fuck did you bother to have kids then? Children are blessings from heaven. If they can not see it that way,…

Are you a parent?

I really don't think humans evolved to have a nuclear family with no external support from grandparents, uncles, aunts, neighbours, etc. We also have a scenario where children have been robbed of their independence (suburban design patterns, dangerous drivers, fearmongering on the news about child molesters, etc.) - so you can't just shove your 5 year old out the front door at 9 AM and tell them to come back for lunch.

I would _much_ rather watch my kids and my nieces and nephews for half a day, then trade, than watch my kids all day long. It's utterly grueling.

Re: Home ownership is the West’s biggest economic-policy mistake

#100

Post by CalRobert »

pjc50 wrote: post #84
Mengkudulangsat wrote: post #70

Earlier quoted context omitted.

I'm a millennial and I plan to rent forever because I value the ability to move out whenever I liked. Even homeowners can't escape that sword of Damocles you describe. IMO as long as you have assets (stocks, cash, etc.) that you can periodically liquidate to cover expenses, the form of those assets doesn't matter.

> as long as you have assets (stocks, cash, etc.) that you can periodically liquidate to cover expenses "I don't care because I have a trust fund" is not the argument you think it is. If you're talking about accumulating wealth, I note that (in the UK at least) the gain you can make without incurring tax is somewhat limited but the house that you're living in has unlimited exemption from capital gains tax.

Similarly in Ireland, it's crazy that people here wonder why homes are so expensive when we have an asset class free of CGT where ownership gives you a right to object to the creation of any more supply of said asset. What a deal!
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