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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

#401

Post by Ekaros »

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.

Plenty of cheap areas, in many countries. Just have to give up things like jobs and services(both public and private). But they do exist. And aren't desirable for exactly those reasons.

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

#402

Post by danjac »

ZephyrBlu wrote: post #140
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…

Your GF gets rejected on a financial basis while making 75k euros? How expensive are the places she's trying to rent? > We are already looking to move to other places and created a university-wide google sheet where we compare different countries and cities around the world for those kinds of categories It seems like if you want to live anywhere that's desirable you have to pay an arm and a leg for rent, no matter wh…

75K is a good salary in Germany, well above the average of 49K:

https://housinganywhere.com/Germany/average-salaries-in-germ...

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

#403

Post by ricardobayes »

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.

I like to browse the real estate market just for fun sometimes and actually yes there are cheap areas in every country. Some are cheap due to remoteness, due to inventory or mismanagement/decline. Like in mentioned in another comment, (south) Spain has incredibly cheap properties because there are many available and mortgages are available to even non-residents (not necessarily _in_ cities, but within a 30 min radius from population centers). Generally speaking 15 minutes inland from the sea is cheap everywhere (apart from luxury pockets like Marbella), you can easily buy a nice mediterranean villa for less than 200k. If you want views that's around 250-300k.

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

#404

Post by abbe98 »

alephnerd wrote: post #368
ctroein89 wrote: post #310

Earlier quoted context omitted.

Sweden abolished inheritance taxes because the cost of enforcing the tax was greater than the taxes raised, and was passed by a left-wing coalition. At the time, it was considered a success of social democracy to not need inheritance taxes (and in fact, everyone, including the law, referred to dödsskatten - the death tax). 20 years isn’t ready enough time for wealth to consolidate like that via inheritance alone, and…

"The question we set out to answer in this study is how the Swedish personal wealth distribution has evolved since 2007. This year, a right-wing party alliance was elected after a long period of Social Democratic rule and among its first reforms was to repeal the wealth tax ... Our main result concerning wealth inequality in Sweden is that it appears to have increased since 2007. The recorded rise in the Gini coeffic…

"wealth tax" is a different tax on income, inheritance tax ended in 2005.

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

#405

Post by parker_mountain »

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…

American here, in silicon valley. I'm actually a bay area native, and the only reason I'm able to stay close to my parents is that I make a "tech salary". I bought a moderately sized condo, and it was a huge stretch at the time when I bought it - now that I've advanced my career, it's not such a huge load.

But, the fact that, at $110k a year, a two bedroom (yet small) place was a huge stress. And that was not even in not one of top 3 most expensive cities in the bay area, which should say something.

I'm extremely grateful that I can live close to my parents, and will be able to help take care of them as they age.

Something is broken when it's a financial pressure for someone in the top 10% of income to live within an hour drive of where they want to be. And, that's kind of a luxury, tbh. I have extreme sympathy for the working class. There's something fundamentally broken with our housing policy.

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

#406

Post by [deleted] »

OnlineGladiator wrote: post #192
satvikpendem wrote: post #113

Earlier quoted context omitted.

It really isn't that simple, because again, no one really can say how it is so simple, merely that it is, somehow. Economists also talk about this point often, and they also can't agree, generally speaking, on how to, or even if to, reduce the inequality gap. The best solutions I've seen are land value taxes, inheritance and estate taxes, and taxes on loans backed by stock; and among the worst are unrealized capital…

The simplest solution is a wealth tax. Once you reach a certain amount of wealth, you are taxed for it. So for instance you might be taxed 50% of your wealth above $1 billion, annually. You might be taxed 25% of your wealth above $100 million (up to the next cutoff, so a billion in this hypothetical). You might be taxed 10% of your wealth above $10 million but below the next cutoff, and so on. We could even take this…

[deleted]

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

#407

Post by ianai »

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...

I have been wondering about that. I’m not entirely certain of the effects either. Being held by corporate investors should mean they would be divested in certain circumstances, though.

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

#408

Post by mclightning »

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…

>> 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.

How is that possible? I am an immigrant who moved to Sweden at age 22, and I bought an apartment in Malmo after 2 years of savings in the center of Malmo. I wasn't in the top percentile, didn't get help from anyone else. It was entirely my own savings within that 2 years.

Maybe you shouldn't aim for center of Stockholm for your first home purchase...

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

#409

Post by ako »

ars wrote: post #380
Bellend wrote: post #155

Earlier quoted context omitted.

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 house…

Housing prices are mostly a function of supply and demand, but heavily influenced by demand from investors, and the limitation that not all supply is created equal: it’s all about location, location and location.
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