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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

#351

Post by layer8 »

watrami wrote: post #103

It seems like it's the same story everywhere I look. Housing is the main driver of inequality and there is little change happening. We have the same problem here in Germany. I am currently living in Munich to finish my CS Master's at TUM and build a startup, and it is absolutely impossible to find anything remotely affordable. I am supported by two startup scholarships and make enough to get by, but no landlord even…

> And it's not just Munich. Every city in Germany has this problem.

No, Munich is an outlier. You generally can find apartments under 10€/m² without too much trouble, at least in mid-sized cities. However, it’s true that rents have been rising significantly over the past decade or so.

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

#352

Post by secrecymatrix »

LegitShady wrote: post #322
xist wrote: post #275

Earlier quoted context omitted.

Make sense, rich people would have an easier time to immigrate. But how many of this dozen are here on TFW like you're suggesting? I'm doubtful that it's TFW that are buying the properties you're concerned with, especially since they're still at the mercy of PR/work authorization laws that could make them leave the country at any time. It _could_ happen, but that would be pretty exceptional. You want to complain abou…

TFW are used to drive down wages. international students do purchase houses for their families out of country - it happens more in some areas than others. And if someone couldn't get in as a student, they might try to get in as a TFW and spend their family money on a home - I don't know how often it happens but its allowed because TFWs DO buy houses.

Speaking of students: https://vancouversun.com/business/real-estate/31-1-million-p...

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

#353

Post by brodo »

f6v wrote: post #330
watrami wrote: post #103

It seems like it's the same story everywhere I look. Housing is the main driver of inequality and there is little change happening. We have the same problem here in Germany. I am currently living in Munich to finish my CS Master's at TUM and build a startup, and it is absolutely impossible to find anything remotely affordable. I am supported by two startup scholarships and make enough to get by, but no landlord even…

> Germany paid a lot for our education but offers us little reason to stay. Yet many-many people come to Germany every year to join tech companies.

It‘s the “the grass is always greener” phenomenon.

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

#354

Post by prawn »

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”…

I agree with the generalisation, but as a homeowner in another Western country, I'm unsettled by the "up & to the right": creates a less affordable environment for my children, and leads to a less stable place to live. I'd guess you generally get a safer community with more people invested in it and fewer people in desperate situations.

Further, affordable housing (as in, literally affordable, and not under some means-tested scheme) means more opportunities for me to buy further properties.

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

#355

Post by sumedh »

LegitShady wrote: post #249
mthoms wrote: post #231

Earlier quoted context omitted.

Are there any economists that support your theory? Namely that (if I understand your point correctly) immigration is hurting the economy more than it’s helping? Everything I’ve seen claims the opposite - but I’m open to new information. Also, what support do you have for the claim that the existence of temporary foreign workers suppress wages for working Canadians? My understanding is that they are performing jobs th…

They aren't doing jobs canadians wont do, they're doing jobs canadians wont do for the wages being offered. If they raised the wages, people would want to do them. Instead companies hire at very low wages, and very few people want to work for them, they apply to bring in TFW who are desperate. Their presence suppresses the wages because there's a basically unlimited pool of people willing to work for suppressed wages…

What is TFW?

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

#356

Post by ars »

shagie wrote: post #245
ianai wrote: post #218

Earlier quoted context omitted.

Eventually death, disease, or divorce will force properties to sell. That will move market values down. Meanwhile, my buddy’s mobile home manufacturer is back to being able to output a home in weeks. Construction has already fallen off a cliff-which makes sense given that’s the easiest to spin up/down of the market. The RE market is responding to the rates. Though, whether it’ll be enough is beyond my knowledge or po…

That assumes that the entities buying the housing are subject to death, disease, and divorce. From 2022: Investors bought a record share of homes in 2021. See where. - https://wapo.st/3ZDSZqm Strong Towns from 2022: Corporate Investors Own Nearly Half of This City's Residential Property - https://www.strongtowns.org/journal/2022/5/25/corporate-inve...

Investors are irrelevant, people still live in those houses.

Only empty houses actually cause trouble.

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

#357

Post by isoos »

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…

This looks like a common pattern at other places too: you won't get "best-neighborhood" wealth from being first- (or sometimes even second-)generation high achiever. The root cause seems to be that there are usually more high achievers than properties in good neighborhoods, and old wealth erodes slowly (may take a generation or two), so there is very little pressure for old occupiers to sell their properties.

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

#358

Post by serpix »

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…

With mortgages paying down only the interest doesn't this mean people can become chained to the property? Unable to sell due to the value drop and having to own money to the bank after selling?

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

#359

Post by brodo »

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…

Same is true for me in germany. I know a really wealthy guy inherited his money. I will never reach his level. I know people who have successful start-ups. They earn well, but they will not reach “old money” levels of wealth.

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

#360

Post by rullelito »

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…

> It's basically impossible for me to afford a house / apartment for my family in the best neighborhoods.

Why would you expect to be able to buy a family house/apartment in the best neighberhoods just because you are in the top income percentile? Wealth percentile matters.

I'm also in the top income percentile in Sweden, and I can basically buy 99.9% of all houses/apartments in Sweden, which I think should be enough for most people..

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