Dutch cities want to ban property investors in all neighborhoods

> For a small village of less than 5,000 people nowhere near any sort of city or population centre, this seems like a lot.

Not really, people want to live there, and can now live there while working in a decent job, raise a family, send kids to school, etc.

Without remote work, villages like that are meaningless. Communication and social changes caused by covid have allowed people to actually live in remote villages.

> For a small village of less than 5,000 people nowhere near any sort of city or population centre, this seems like a lot.

Not really, people want to live there, and can now live there while working in a decent job, raise a family, send kids to school, etc.

Without remote work, villages like that are meaningless. Communication and social changes caused by covid have allowed people to actually live in remote villages.

House prices have shot up since the mid 90s as they become more affordable. A new 3 bed home in say east anglia is more affordable now (compared with median wages) than it was in 1980, despite being far far more expensive to buy. That's because

1) Most households have two incomes rather than one 2) Interest rates are much lower

House prices rise to the level people are able to pay for them. Remote work has allowed people to live in villages like St Just and continue in a decent job, which is great. Before it was mainly retirees and holiday owners, neither of which were good for the area.

The issue of housing affordability comes up a lot on HN and the discussion often turns to a shortage of supply.

Often overlooked is the demand side of the supply and demand equation. From my perspective (mostly familiar with the NZ/AU markets), this is where the real problem lies.

Statistics New Zealand have collected data on the total number of private residences and the total number of households since the mid-90s. The difference between the two has almost doubled to around 7.5% nationally. There are substantially more empty or under-utilised residences in a time where every politician is telling us that building more houses will fix the problem. It won't. At best it will alleviate the problem.

Prosper Australia's Speculative Vacancies Report [0] (looking at water usage to determine under-utilised properties) suggests areas with high vacancy rates in Melbourne correlate with areas where capital gains (i.e. percentage price increases) are greatest. This is the opposite of what you would intuitively expect in a naive supply and demand equation - desirable areas have higher vacancy rates, even approaching 20% by their reckoning.

A study in the UK [1] using council data found that high property prices correlate strongly with what the study refers to as 'low use properties' (LUPs).

I wouldn't be at all surprised if the situation is the same in the Netherlands.

All of this suggests that demand for investment, not demand for housing is driving prices up. Zoning restrictions and other regulations do play a part, but I think in many cases their influence on the larger picture is overstated. Cheap loans, leverage, and favourable taxes make property a good investment.

The only solution is to make property investment less attractive. A land value tax - though politically difficult - seems to me to be a good option.

[0] https://www.prosper.org.au/wp-content/uploads/2019/04/Specul... [1] https://theodi.org/event/friday-lunchtime-lecture-empty-home...

> that the idea EU immigration was driving down wages was a cynical lie

It was a lie, EU citizens in the UK earn significantly more than the locals. If I wanted to be a member of the underclass, say a cleaner, I’d be in Germany, where I wouldn't have to pay 6K£ for pregnancy and 12K£pa to send a child to a half-decent primary school.

What exactly does it mean that investors are driving up prices? As far as I know an investor gets two things by owning a house: a stream of future rent payments, and an appreciating asset. We can easily calculate the present value of the future rent payments. It would be a weird and obviously temporary condition if homes were selling for less than this. A market in disequilibrium. Is that the theory here? The healthier housing market we had in the past was homes priced at less than the NPV of their rents?

Maybe the investors are simply irrational and are overpaying for these properties? Hoping for greater fools? This seems like great news. Everyone who owns a property should sell it to one of these exuberant investors, enjoy the hefty profit, and rent (perhaps from the same person, without even moving house) while waiting for the crash. If this is our contention then rents are reasonable and people who simply want to be housed should just pay them.

Or maybe the market has always been in equilibrium and the investors have always been rational, but now the NPV is rising. It could do this for two reasons: the rents going up, or the discount rates going down. It seems plausible that both of those things are happening. The unstoppable force of urbanization meets the immovable object of NIMBYism; urban rents rise. Low interest rates reduce the discount rate. Although stock market returns have been incredible, so I'm less sure about this part. In any case, maybe what we're looking at is new, higher NPVs and we're hoping to keep the housing market in disequilibrium to prevent prices from catching up to that NPV?

I guess the final paragraph seems the most likely. And, well, good luck. When there's a systematically under-priced asset, people are going to find a way, rules or not. It would seem a lot more effective and sustainable to address the drivers of the rising fundamental value.

> If we take out the pandemic impact

How do you reliably isolate the effect of the pandemic from other effects occurring at the same time?