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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

#71

Post by ur-whale »

jdmoreira wrote: post #61

I'm in the highest percentiles of income in Sweden (public data is available) and it doesn't matter. It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods. What's the point? What is the point of trying to be a high performer if wealth can't be acquired by income? Why would I want to work for anyone in this country? Only way out is equity and that game is even harder to…

> What's the point?

Equality of outcomes: everyone is equally poor.

Why are you not moving to another country is the question.

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

#72

Post by tptacek »

varispeed wrote: post #46
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]

This is a conspiracy theory about a global suit-and-tie version of TED Talks whose members consistently underperform the S&P 500. The World Economic Forum sounds important, like the IMF is, but it's nothing at all like that. It's a convention, in the ComicCon sense, that happens to be frequented by high-status people, because high-status people go where other high-status people go.

Ironically, talking about them as if they're engineering the future of Europe is probably the only thing anybody can possibly do to give them any kind of impact.

The solution to housing affordability is to build more housing. It's not complicated. But people who own housing today have a vested interest in preventing new housing development.

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

#73

Post by im_down_w_otp »

VirusNewbie wrote: post #50
im_down_w_otp wrote: post #31

Earlier quoted context omitted.

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?

If they want to maximize the sale price of their condo? Yes. They’ll just have to relocate to a different housing market to buy that mansion.

You just described every Californian who upsized by moving out of state. They definitely wanted their condo, bungalow, or shack to get top dollar in their market.

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

#74

Post by bugglebeetle »

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…

[flagged]

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

#75

Post by xyzzy123 »

brabel wrote: post #53
havblue wrote: post #15

Earlier quoted context omitted.

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!

If you invest your money on anything that gives , say, 5% yearly returns on your money, instead of paying off your mortgage, which used to be at less than 2% (but is not getting beyone 4%), you're just better off. Say you start with a 10,000 mortgage, and your payment per year is 500, not including interest. By the end of the year, you'll have a 9,500 mortgage left. If you just invested the 500 and only paid interest…

Risk, I think. For most people this is a higher risk strategy long term than just "paying the mortgage". Depending on your life stage and overall position it can make sense but it's not for everyone.

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

#76

Post by bambam3000 »

varispeed wrote: post #46
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]

Glad to see people on here talking about this stuff, I thought I was the only one!

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

#77

Post by jdmoreira »

ur-whale wrote: post #71
jdmoreira wrote: post #61

I'm in the highest percentiles of income in Sweden (public data is available) and it doesn't matter. It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods. What's the point? What is the point of trying to be a high performer if wealth can't be acquired by income? Why would I want to work for anyone in this country? Only way out is equity and that game is even harder to…

> What's the point? Equality of outcomes: everyone is equally poor. Why are you not moving to another country is the question.

I could. I have zero attachment to places. But it would be though on my wife and daughter (who both are Swedes, I'm the only immigrant)

And not everyone is equally poor. Sweden has one of the highest number of Billionaires per capita in Europe. In fact wealth inequality (not income inequality) is almost as high as russia.

Source: https://medium.com/@samo.burja/the-family-that-finances-swed...

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

#78

Post by efraim »

jcz_nz wrote: post #41
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".

Your source doesn't seem accurate. Swedish immigration has been decreasing for the last 7 years, it is now back at the same level as 2012 but it was increasing every year since the mid 90s before that at was at its peak in 2016.

https://www.scb.se/en/finding-statistics/statistics-by-subje...

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

#79

Post by bambam3000 »

tptacek wrote: post #72
varispeed wrote: post #46

Earlier quoted context omitted.

[flagged]

This is a conspiracy theory about a global suit-and-tie version of TED Talks whose members consistently underperform the S&P 500. The World Economic Forum sounds important, like the IMF is, but it's nothing at all like that. It's a convention, in the ComicCon sense, that happens to be frequented by high-status people, because high-status people go where other high-status people go. Ironically, talking about them as i…

No, it's more of a conspiracy fact.

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

#80

Post by robocat »

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.

I usually find that “obvious” reasoning is very often wrong, especially when politically contentious.

You could look at countries with higher rates of immigration (say my own country New Zealand at 30% immigrants, compared against Sweden with 20%, although NZ immigrants are often middle-class from culturally compatible English countries). Switzerland has 30% immigrants. https://wikipedia.org/wiki/List_of_sovereign_states_and_depe...

You can sometimes find good articles with facts that help define the point you are trying to make.

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