What broke Sweden? Real estate bust exposes big divide • Hacker News Board

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

#41

Post by jcz_nz » Sat, Apr 01, 2023, 10:32 PM UTC

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.

Swedish immigration has been decreasing for the last 14 years. https://www.macrotrends.net/countries/SWE/sweden/net-migrati....

Oddly enough, profitability of Swedish banks has been increasing for the last 14 years: https://www.macrotrends.net/countries/SWE/sweden/net-migrati....

Maybe you can come up with an argument actually grounded in reality, rather than the same old BS "oh it's the poor".

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

#42

Post by mihaaly » Sat, Apr 01, 2023, 10:32 PM UTC

varispeed wrote: post #14

ChuckNorris89 wrote: post #8

Earlier quoted context omitted.

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 pr…

I wonder why the rich and those in charge of regulating and steering policy think it will not end bad for them too when masses could not afford the housing on the highly inflated prices fuelled by passive money drawn out of economy into "investment" (more like sleeping) properties, hence crashing housing prices all around making them loose a lot. And that all that living cost hikes will not exacerbate things further accelerating this crash as people need to spend sooo much on housing less remains there for the functional parts of the economy? They hope they die before this comes or what?! They will not be in charge and could sip gin and tonic silently in a big warm garden somewhere before this happens? But what about their children and their other young family members? What will they do with properties woth nothing in a dissolving society where it will not be good or perhaps not even safe living due to unrest of the poor? A frequently repeting worry in articles and analysis here and there is the gigantic wealth accumulated for few stucked away suffocating the rest of the society and raising desperation yet what I can see people seem to mumble "it's ok so far, it's ok so far" to themselves while falling alongside a high rise building. Do they hope for a soft landing with this behaviour? They hope that printing cash in increased speed pumped into even more passive wealth here and there through the sliding middle and lower classes will last forever?

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

#43

Post by jjoonathan » Sat, Apr 01, 2023, 10:37 PM UTC

gruez wrote: post #37

jjoonathan wrote: post #28

Earlier quoted context omitted.

Misguided handout-seeking poor are not stopping construction. Rent control doesn't solve the problem, but it doesn't cause the problem either. > NIMBYsm in disguise Yes, this is the real problem: the same capitalist incentive structure that pulls forward the future returns of a new housing investment also pulls forward the consequences of future supply normalization onto current owners. Capitalism also guarantees tha…

>Rent control doesn't solve the problem, but it doesn't cause the problem either. It causes the problem by diminishing the returns for new construction. That in turn disincentivizes people willing to fight through the bureaucracy to get new construction approved. >Capitalism also guarantees that these owners are the ones with power. It gives them the means and the motive to torpedo new development. So they do. I'd be…

> super-PACs or lobbyists

Presidents don't make zoning decisions. Next time you attend a zoning meeting, take a good look at the people who are most passionately creating friction (or their power base, if they are outsiders). You will find a bunch of property owners looking after their property values.

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

#44

Post by brabel » Sat, Apr 01, 2023, 10:38 PM UTC

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.

Very true. I wanted to buy an investment property in Sweden, and rent it out while waiting for prices to go back up in a few years... but learned that this is not a thing here! If you want to rent out, you need permission of your building association, which normally won't give it... or you can buy a "detached house" (no association) which is usually much more expensive, but then you must deal with renters and find them yourself, as the real estate agents , apparently, are not allowed to handle that. WTF?! Makes me wonder how the heck prices got so bloody high in the big cities when investing in property is virtually impossible.

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

#45

Post by rhaway84773 » Sat, Apr 01, 2023, 10:39 PM UTC

The Sweden story sounds so much like the SF story.

Area doesn’t building housing, leading to a massive increase in house prices and a destruction of class mobility as the rich get richer (as their houses get more valuable) and the poor get poorer (as they pay more to rent the same living space).

The growing wealth inequality leads to all sorts of other dysfunction including increased crime, worsening services, etc. as the govt cannot raise enough taxes.

And finally, instead of solving the fundamental expensive housing problem, opportunists will blame the other. More often than not the other are the victims of the problems. Immigrants in Sweden’s case, and since one can’t blame immigrants for obvious reasons in SF, homeless people in SF.

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

#46

Post by varispeed » Sat, Apr 01, 2023, 10:42 PM UTC

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…

[flagged]

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

#47

Post by gruez » Sat, Apr 01, 2023, 10:42 PM UTC

jjoonathan wrote: post #43

gruez wrote: post #37

Earlier quoted context omitted.

>Rent control doesn't solve the problem, but it doesn't cause the problem either. It causes the problem by diminishing the returns for new construction. That in turn disincentivizes people willing to fight through the bureaucracy to get new construction approved. >Capitalism also guarantees that these owners are the ones with power. It gives them the means and the motive to torpedo new development. So they do. I'd be…

> super-PACs or lobbyists Presidents don't make zoning decisions. Next time you attend a zoning meeting, take a good look at the people who are most passionately creating friction (or their power base, if they are outsiders). You will find a bunch of property owners looking after their property values.

>Next time you attend a zoning meeting, take a good look at the people who are most passionately creating friction (or their power base, if they are outsiders). You will find a bunch of property owners looking after their property values.

That's... exactly what I was arguing for? In the subsequent sentence:

>They're just people showing up to local government meetings in their spare time.

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

#48

Post by bequanna » Sat, Apr 01, 2023, 10:45 PM UTC

rhaway84773 wrote: post #45

The Sweden story sounds so much like the SF story. Area doesn’t building housing, leading to a massive increase in house prices and a destruction of class mobility as the rich get richer (as their houses get more valuable) and the poor get poorer (as they pay more to rent the same living space). The growing wealth inequality leads to all sorts of other dysfunction including increased crime, worsening services, etc. a…

> The growing wealth inequality leads to all sorts of other dysfunction including increased crime, worsening services, etc. as the govt cannot raise enough taxes.

Hold up. I don’t think the people of San Francisco grew weary of increasing rents and decided to turn to a life of crime.

Most of the “trouble makers” in the Bay Area are recent arrivals to the area and come because of poor policing and the government is generally more tolerant of them.

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

#49

Post by varispeed » Sat, Apr 01, 2023, 10:46 PM UTC

mihaaly wrote: post #42

varispeed wrote: post #14

Earlier quoted context omitted.

> 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 pr…

I wonder why the rich and those in charge of regulating and steering policy think it will not end bad for them too when masses could not afford the housing on the highly inflated prices fuelled by passive money drawn out of economy into "investment" (more like sleeping) properties, hence crashing housing prices all around making them loose a lot. And that all that living cost hikes will not exacerbate things further…

The solution for this will be CBDC - electronic programmable money and social credit score. The class of the ultra rich that has developed and controls the governments will use the poor as means of production - since they already own most of the economy, there is no longer any need for markets in the traditional sense, that we know.

At one point if you have 100 billion, it doesn't matter if you have 101 or 200. The capitalism has reached its end and the rich are preparing us for the so called fourth industrial revolution.

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

#50

Post by VirusNewbie » Sat, Apr 01, 2023, 10:47 PM UTC

im_down_w_otp wrote: post #31

joshuaissac wrote: post #21

Earlier quoted context omitted.

> The reason you are looking for is called corruption. It could just be democracy. Homeowners are an important vote bank and they generally want house prices to rise. A government that substantially increased housing supply would cause house prices to drop, which would make homeowners unhappy.

I try to remind people in the US that there’s exactly one constituency that wants affordable houses. People who don’t have houses yet. Everybody else wants housing to continue to be a growth investment, and thus increasingly unaffordable. Developers want to make & sell more expensive things. Lenders want to make more & bigger loans. Existing owners want the value of their most valuable asset to go “up & to the right”…

If someone owns a condo and wants to buy a mansion, does it make sense for them to hope all real estate appreciates in price vs depreciates?