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House prices surpass housing-bubble peak on price-to-rent ratio

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Re: House prices surpass housing-bubble peak on price-to-rent ratio

#121

Post by lotsofpulp »

nly wrote: post #115
thehappypm wrote: post #95

Earlier quoted context omitted.

There are tons of incentives for first time home buyers! They just aren't really marketed. You can take out a mortgage against your own 401(k) for your first home. You can use a VERY low down payment loan (like 0% in some cases) for your first home. Tax rates are lower in many places for homeowners than renters -- in Boston and Somerville MA, this comes out to a pretty substantial tax credit.

All of those incentives just increase demand for housing and bid up prices. Supply needs fixing.

Because they are actually benefits for current asset owners looking to sell (or borrow using existing property as collateral).

If the government wanted to help buyers, they could just give them cash and/or increase supply of housing in the in demand areas.

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#122

Post by closeparen »

akudha wrote: post #35

I wish something is done about these rentiers. Someone I know is amassing a rental property portfolio, while I am struggling to buy my first home. I am not against people making money and getting rich, but it would be nice if it wasn’t so easy to buy up multiple properties simply because they have the cash. There should be all kinds of incentives for first time home buyers. But it should be made very expensive/very p…

People need places to live and we aren’t making more of them. There’s no world where public policy guarantees such scarcity relative to fundamental demand but speculators look the other way. Let them invest in development instead.

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#123

Post by nly »

lotsofpulp wrote: post #121
nly wrote: post #115

Earlier quoted context omitted.

All of those incentives just increase demand for housing and bid up prices. Supply needs fixing.

Because they are actually benefits for current asset owners looking to sell (or borrow using existing property as collateral). If the government wanted to help buyers, they could just give them cash and/or increase supply of housing in the in demand areas.

So in the UK the Government is already underwriting first-time buyer mortgages for anyone with a 5% deposit on properties up to $850K USD.

This helps noone short term because the banks just pocket the subsidy, and long-term it just drives prices even higher.

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#124

Post by ericmcer »

akudha wrote: post #35

I wish something is done about these rentiers. Someone I know is amassing a rental property portfolio, while I am struggling to buy my first home. I am not against people making money and getting rich, but it would be nice if it wasn’t so easy to buy up multiple properties simply because they have the cash. There should be all kinds of incentives for first time home buyers. But it should be made very expensive/very p…

It's crazy that we created a similar environment to the last economic collapse again. Not as brittle but the same environment where if I have been aggressively going deep into debt and mortgaging one property to buy another I will be making more than highly paid professionals off my assets. I don't know why we love creating these situations where saving and working hard are punished but recklessness and rent seeking are rewarded.

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#125

Post by refurb »

akudha wrote: post #50
TimPC wrote: post #37

Earlier quoted context omitted.

If only there was a law that allowed you to deduct a significant amount of mortgage interest from taxes on a home but not on other property.... Oh wait...

Trying to be sarcastic and clever? Any taxes that you pay on your second home onwards simply gets factored into the rent and gets passed on to the tenants. It is just cost of doing business, nothing more. The tenants suffer, not the buyers.

That’s not how rent works. Just because the landlord’s costs go up doesn’t mean rents go up.

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#126

Post by refurb »

ghaff wrote: post #61
mumblemumble wrote: post #53

Earlier quoted context omitted.

If we're talking the US, that law is for the benefit of the rich. In general, the interest won't exceed the standard deduction unless you've got a rather obscenely priced home.

That didn't use to be the case. The mortgage interest deduction used to be a solidly middle class benefit. But, yes, with relatively recent changes to the tax code, it's a lot harder for most people to hit the standard deduction and therefore mortgage interest is often not deductible unless someone has a higher end home in an expensive area.

You mean the changes that made the standard deduction larger than typical mortgage interest deductions?

It’s not that the deduction went away, it’s that everyone got a bigger standard deduction so no need for the mortgage interest.

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#127

Post by harambae »

cletus wrote: post #32
ghaff wrote: post #29

Earlier quoted context omitted.

Rental cars seem to be a mess. I know at least one person who canceled a trip because they couldn't get a rental car. And I reserved one for a trip at the end of September "just in case" and the price seemed significantly higher than normal.

Rental car prices are extremely high. That’s not your imagination. This is a result of car rental companies selling a third of their fleet last year to survive so supply is way down and demand came roaring back. Tip: hire a UHaul instead. Much cheaper.

>Tip: hire a UHaul instead. Much cheaper.

I see everyone recommending this, but the U-Haul's I'm used to charge per mile so watch out for this if you're planning a roadtrip

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#128

Post by harambae »

refurb wrote: post #125
akudha wrote: post #50

Earlier quoted context omitted.

Trying to be sarcastic and clever? Any taxes that you pay on your second home onwards simply gets factored into the rent and gets passed on to the tenants. It is just cost of doing business, nothing more. The tenants suffer, not the buyers.

That’s not how rent works. Just because the landlord’s costs go up doesn’t mean rents go up.

Yes, to some extent. The rent is dictated by the market price, which could be a gain or loss for the owner.

But if every landlord's costs go up, then everyone's rent probably goes up, since the landlords are competing with each other.

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#129

Post by refurb »

silicon2401 wrote: post #69
akudha wrote: post #51

Earlier quoted context omitted.

The very fact that you are trying to rationalize someone buying multiple homes at the expense of someone trying to buy their first home highlights the problem. Take Canada for example. A whole lot of homes are bought by Chinese buyers and are sitting idle, at the expense of Canadians trying to buy their first home. How can you say this is morally right? It is all find and dandy for the Chinese buyers, but what of Can…

This is a great example of the many flaws in globalism. If Canada were to put higher restrictions on foreign real estate purchases, Canadians wouldn't be in such a pickle. The flaw of generosity is that it leaves you vulnerable to being taken advantage of, which is what's happening in this case.

Canada’s rate of home ownership has never been higher. Data on foreign purchases puts it in the low single digits in cities like Vancouver.

It’s mostly Canadians driving up the cost of housing. I mean, how many foreigners are buying in Winnipeg where prices are way up?

Re: House prices surpass housing-bubble peak on price-to-rent ratio

#130

Post by Tempest1981 »

Teever wrote: post #85
yunohn wrote: post #84

Earlier quoted context omitted.

Dude, this is not some weird fine line slippery slope situation. Normal people don’t often buy 269,000 of acres of land, only influential people like Bill Gates can.

The claim is that Bill Gates has bought too much farm land. If someone is making that claim surely they can clarify exactly what too much is and why. How do you expect anyone to take this suggestion seriously? How do you expect actual policy to be set without clearly defined boundaries of acceptable behaviour?

The quantity should also depend on the land quality, imo.

For example, Larry Ellison's island in Hawaii, vs rural undeveloped landlocked farmland.

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