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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

#371

Post by jdmoreira »

rullelito wrote: post #360
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…

Can you explain me how the math works on this? Because I certainly can't afford 99.9% of the houses/apartments in Sweden.

Let's forget anything crazy. Let's just talk about a 70sqm apartment in Kungsholmen

and of course wealth percentile matters. In fact, I understand that way too well. How do you raise your wealth percentile then? The whole point people are raising is that it's hard to become wealthy in Sweden from income. Actually much harder than in other countries. It might have worked for you in the last 20 or 30 years. Not sure that means it will work for others the same way in the next 30 years.

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

#372

Post by marvin »

r00fus wrote: post #324
dehrmann wrote: post #309

Earlier quoted context omitted.

REITs aren't the problem; it's a lack of construction.

You can build all you want the corporate and foreign wealth will still buy it before people can.

Well, if they keep buying once there are twice as many housing units as people that want to buy them, they’ll go bankrupt and no one will buy their assets at a reasonable price. So that problem solves itself.

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

#373

Post by marvin »

satvikpendem wrote: post #105
amelius wrote: post #102

Earlier quoted context omitted.

> the rich get richer (...) and the poor get poorer It's always the same story. Can't we just make the economy more fair by saying that the wealth gap must at least be smaller than some value or else the rich will pay (taxes) to make it so?

Lots of people say this but very few have a concrete idea of what is needed to accomplish this. What taxes are the rich going to pay? Who among the rich? How does one define "rich?" Et cetera.

Legalize home construction in the places where people want to live. That solves the biggest issue.

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

#374

Post by mbrameld »

dehrmann wrote: post #309
r00fus wrote: post #289

Earlier quoted context omitted.

REITs buy up housing everywhere. That’s your answer - the wealthy elite need ways to keep making money.

REITs aren't the problem; it's a lack of construction.

I have to think short-term rentals are a big part of it, too. Open up AirBnB in any city and see how many units have been lost.

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

#375

Post by somedude895 »

erur wrote: post #263
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…

It's definitely not every city in Germany that has this problem. You're trying to live in one of the objectively best parts of Germany by a lot of stats and thus you're competing with a lot of folks. I'm honestly sick of this whining about rent in top-tier areas. Living there is a luxury, given the major move to cities and scarcity, driven by insane regulations and basic logic. There are plenty of cities in Germany w…

> I'm honestly sick of this whining about rent in top-tier areas.

I don't know if this applies to GP, but we certainly get this in Zurich, Switzerland. We have a fantastic public transport system, and you can get fairly affordable apartments that are <30mins away from the city center of Zurich by train. But people somehow feel they have a right to live dead center in one of the most expensive cities in the world right after graduation.

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

#376

Post by rullelito »

jdmoreira wrote: post #371
rullelito wrote: post #360

Earlier quoted context omitted.

> 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…

Can you explain me how the math works on this? Because I certainly can't afford 99.9% of the houses/apartments in Sweden. Let's forget anything crazy. Let's just talk about a 70sqm apartment in Kungsholmen and of course wealth percentile matters. In fact, I understand that way too well. How do you raise your wealth percentile then? The whole point people are raising is that it's hard to become wealthy in Sweden from…

> Let's forget anything crazy. Let's just talk about a 70sqm apartment in Kungsholmen

Come on.. It's the third most expensive district in Sweden.

Also, if you're two 99%ile incomers, Kungsholmen seems perfectly attainable..

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

#377

Post by [deleted] »

rullelito wrote: post #376
jdmoreira wrote: post #371

Earlier quoted context omitted.

Can you explain me how the math works on this? Because I certainly can't afford 99.9% of the houses/apartments in Sweden. Let's forget anything crazy. Let's just talk about a 70sqm apartment in Kungsholmen and of course wealth percentile matters. In fact, I understand that way too well. How do you raise your wealth percentile then? The whole point people are raising is that it's hard to become wealthy in Sweden from…

> Let's forget anything crazy. Let's just talk about a 70sqm apartment in Kungsholmen Come on.. It's the third most expensive district in Sweden. Also, if you're two 99%ile incomers, Kungsholmen seems perfectly attainable..

[deleted]

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

#378

Post by SergeAx »

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…

By "driving", you mean "helps create inequality", right? But inequality is already there. Someone now pays that high rent already; otherwise, landlords would lower prices to avoid empty units.

You are competing with many people from all parts of the EU and, to an extent, the world for the same limited resource. Someone who built their startup and banked on it already came to Germany to work and live there because it is a very comfortable place to live. Refugees without any money at all are willing to go to Germany instead of Greece or Italy, not to mention Bulgaria or Hungary.

I am trying to be a devil's advocate now, but landlords are interested in getting paid as much as possible; it is Economy 101, rational agent behavior. Otherwise, it would be a charity, not a business.

I think moving away, or at least moving your business away, is rational behavior on your side. Take a look at said Bulgaria: Sofia is a dull place compared even to smaller German cities. Still, they have 10% flat taxes for companies and individuals, and for 1000 EUR, you will have a 150 sq.m. two-level apart in the historical city center with 3 bedrooms, a separate dining room, and a large study with a real fireplace. They have a subway to the airport and several budget airlines flying from there to any part of the EU. Source: several people from the company I work for are living there.

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

#379

Post by HeWhoLurksLate »

slaw wrote: post #370
jjav wrote: post #340

Earlier quoted context omitted.

> If it doesn't collapse, then society may collapse? But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society. I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's…

Could you point me to these plenty cheap areas? I work remotely and may consider moving there.

If you're in the USA, the Rio Grande Valley is pretty cheap. Because it's next to Mexico, there's huge amounts of Latino culture & influence.

If you want to be somewhere that feels on the up & up and has cool stuff, Brownsville has a decent amount of engineers for SpaceX and you can go watch launches from a public beach if you get there early enough.

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

#380

Post by ars »

Bellend wrote: post #155
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…

I believe we are in a time where everyone is milking the 90s-20s real estate bubble and no one wants to be first to fold. Internationally, not just on a per country basis. As soon as say, French real estate collapses (or UK or USA or Germany etc), the whole rotten castle of cards will fold as well. If it doesn't you can enjoy the expensive property, but you won't be eating farmed foods, won't be in a clean environmen…

What does "fold" even mean?

Real estate prices are not being artificially elevated, they are a simple function of supply and demand. Just build more houses and prices will do down, and they'll go down slowly, without collapsing.

The typical model works like this: The suburbs around a city grow, the city runs out of space. This causes land in the suburbs to become expensive, so they subdivide lots and build more houses. The suburbs now become the city.

And people move to the edge of the city and create new suburbs, and the city grows.

Of course if you read the propaganda suburbs are evil, but in the real world, they are simply a place where the city will eventually grow to.

Maybe that's the problem? People are actually buying in to the propaganda and not building suburbs, and this breaks the entire model?

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