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What broke Sweden? Real estate bust exposes big divide

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Re: What broke Sweden? Real estate bust exposes big divide

#11

Post by pessimizer »

ChuckNorris89 wrote: post #6

Real estate can either be a lucrative investment or it can be affordable. Why are people continuously acting shocked when they realize it can't be both? And why are elected politicians everywhere continuously shrugging their shoulders as if the housing market is somethin completely outside of their control.

> And why are elected politicians everywhere continuously shrugging their shoulders as if the housing market is somethin completely outside of their control.

This isn't what's happening. Any politician that promised to lower house prices would be demolished by middle class people who

a) think that additional wealth from rising house prices is their just reward for being wealthy enough to own a house, and

b) will be in deep shit on their mortgage if house prices go down, because mortgages are just highly leveraged investments.

edit: whenever house prices seem like they might go down, governments inject huge amounts of tax money into the housing market. The people that tell us in the US that cancelling student debt is a subsidy to the rich will never fail to send direct subsidy to homeowners and prospective homeowners. In that way, government interventions into the housing market only happen as a bubble is popping, and their intention is to maintain bubble pricing.

Re: What broke Sweden? Real estate bust exposes big divide

#12

Post by tpmx »

sgt wrote: post #4

Sweden is broken? That's news to me. Why isn't this in the media?

Young people are upset they can't live centrally in the capital for cheap. Same story as everywhere else. Now go forth with the ritual flogging, er, downvoting.

(I live and work in the countryside of Sweden. I recommend it.)

Re: What broke Sweden? Real estate bust exposes big divide

#13

Post by moltar »

timkam wrote: post #10

A key problem in Sweden -- besides the weird interaction of privatization and legacy over-regulation -- is that the current inflation and rising interest rates break the social contract: a relatively even salary distribution allowed many people to have a solid middle-class life style, recently albeit with never-ending mortgages. Now, the interest rates are too high for these mortgages to be even superficially sustain…

I think you could say exactly the same story about Canada. And imagine many other countries soon. Interest rates will spoil the party.

Re: What broke Sweden? Real estate bust exposes big divide

#14

Post by varispeed »

ChuckNorris89 wrote: post #8
nivenkos wrote: post #7

The main problem is the terrible rent control system - with a lucky few getting rent-controlled first-hand contracts, and everyone else facing a cut-throat almost completely unregulated market of sub-letting. Rent control never works.

Of course it doesn't. The only way to bring down prices is to build more supply than the demand, but for some reason this elephant in the room is always ignored because always a million reasons come up against it, mostly being just NIMBYsm in disguise. Keeping a limited supply artificially price capped through regulations, sounds good at first, and will most likely be popular with clueless voters, but it will lead to…

> but for some reason that route is never explored.

The reason you are looking for is called corruption.

There is a very strong lobby of landlords and the rich treating residential housing as a store of value. It offers better returns than keeping money in the bank and it is safer, especially if you are from a country where your assets could be in danger - it's much harder for foreign states to take control of the property, sell it and recover the monies.

Here in the UK we have the same problem. Good percentage of the ruling party (and opposition) are landlords, there is a ton of foreign money coming in buying up properties left and right and they don't even care if they are rented out, because empty property gives good enough return. We even have banks start to move in this business as well.

It has gone completely mad.

But since big money is all over it and our security services are not interested in looking into it, nothing is going to change it will only get worse.

Re: What broke Sweden? Real estate bust exposes big divide

#15

Post by havblue »

ChuckNorris89 wrote: post #6

Real estate can either be a lucrative investment or it can be affordable. Why are people continuously acting shocked when they realize it can't be both? And why are elected politicians everywhere continuously shrugging their shoulders as if the housing market is somethin completely outside of their control.

It's funny that it was sold as "affordability". Is it really more affordable to have a mortgage that lasts twice as long? Can we really consider interest only to be home ownership? You don't own that home, the banks do, Maverick!

Re: What broke Sweden? Real estate bust exposes big divide

#16

Post by belorn »

It should not be a major surprise that the gap between the haves and the have-nots will widen if you have a large compareable influx of have-nots, or to speak more precisely, an influx of new citizens with low social-economic status compared to those who already were ctiziens. In a very dispassionate perspective, it is just plain math.

It is going to take time to return back to the same levels as before.

Re: What broke Sweden? Real estate bust exposes big divide

#17

Post by FpUser »

belorn wrote: post #16

It should not be a major surprise that the gap between the haves and the have-nots will widen if you have a large compareable influx of have-nots, or to speak more precisely, an influx of new citizens with low social-economic status compared to those who already were ctiziens. In a very dispassionate perspective, it is just plain math. It is going to take time to return back to the same levels as before.

>"It is going to take time to return back to the same levels as before."

Growing divide is universal and pending some tectonic changes in the way our society operates there is no coming back.

Re: What broke Sweden? Real estate bust exposes big divide

#18

Post by xapata »

ChuckNorris89 wrote: post #6

Real estate can either be a lucrative investment or it can be affordable. Why are people continuously acting shocked when they realize it can't be both? And why are elected politicians everywhere continuously shrugging their shoulders as if the housing market is somethin completely outside of their control.

Suppose a large, publicly listed real estate investment trust (REIT) owned a diversified portfolio of housing across the country and operated it all as rental housing. Tenants could buy shares in the REIT and thereby invest not only in their own house, but all the others as well. Less risk and more flexible than home ownership.

The downside for tenants is not being able to renovate. The upside is not being responsible for maintenance.

Re: What broke Sweden? Real estate bust exposes big divide

#20

Post by ChuckNorris89 »

belorn wrote: post #16

It should not be a major surprise that the gap between the haves and the have-nots will widen if you have a large compareable influx of have-nots, or to speak more precisely, an influx of new citizens with low social-economic status compared to those who already were ctiziens. In a very dispassionate perspective, it is just plain math. It is going to take time to return back to the same levels as before.

>if you have a large compareable influx of have-nots

I'm not in Sweden but why are we always pointing the finger at the poor immigrants? Do you think there are no native Swedes being fucked by this real estate market?

Granted, having an open borders migration policy is not a good idea when you have a housing shortage. If you're struggling to provide for the locals, then the newcomers will have it even worse and won't like it, leading to more inequality, social divide, unrest and increased crime.

But blaming immigrants is always a cheap shot politicians take to blame the demographic without voting rights for the problems they themselves are responsible for. "It's not us who screwed you over with inflation and housing while taking your taxes, it's the immigrants who took your job and house".

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