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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

#411

Post by ricardobayes »

nemo44x wrote: post #223
baseline-shift wrote: post #213

Earlier quoted context omitted.

In Japan, there are empty houses going cheap as old people die off. In a few decades, possibly there will be some effect as the de-population bomb from lowered birthrates globally begin to affect real estate prices. Let's hope.

Japan is unique for a few reasons: 1) Very insulated culture with nearly no immigration coupled with low birth rates. 2) They build houses very differently. They aren't generally made to last centuries if taken care of and renovated. The strategy is to build small units cheaply and tare down after 2- years. It's like Ikea for homes. 3) I agree, depopulation is a problem. We really need to incentivize middle and upper…

External incentives to have larger families don't work. Hungary tried giving approx. 30k EUR (a very large sum, locally) to every family who have 3 kids plus other significant tax incentives like 0% income tax rate for life for mums of 3, and afaik these programmes are still on but looking at birth rates it resulted in a 0.8% blip and is still in a sharp downtrend.

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

#412

Post by xapata »

bugglebeetle wrote: post #25
xapata wrote: post #18

Earlier quoted context omitted.

Suppose a large, publicly listed real estate investment trust (REIT) owned a diversified portfolio of housing across the country and operated it all as rental housing. Tenants could buy shares in the REIT and thereby invest not only in their own house, but all the others as well. Less risk and more flexible than home ownership. The downside for tenants is not being able to renovate. The upside is not being responsibl…

Imagine the state did this instead using taxes and eminent domain. Congrats, you’ve invented Vienna, one of the most beautiful cities in the entire world.

I'm not familiar with this program. Could you give me a few keywords to search for, so I can learn about it?

> using taxes

Is it a tax credit? The key is allowing tenants to invest and get dividends from the portfolio, which they can then use to pay for rent (or whatever they like).

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

#413

Post by weatherlite »

satvikpendem wrote: post #113
amelius wrote: post #111

Earlier quoted context omitted.

Well, it could be simple, but the most important reason that it is not simple is because the rich control the system.

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…

Most things aren't so simple and still, it can be done. We got a man on the moon, we split the atom, we built software that can (almost) perform as well as a human being, surely we can tax the rich and corporations more to bring inequality down.

If people think taxes are too complicated (which I don't think is the case) so be it - You can simply transfer money to the poorer people, like what happened in Covid but focus on the poor. Every citizen will have a net worth number, everyone will get a sum of money, the less you have the more you get. Now that will be inflationary of course but the burden will go to the rich instead of the poor.

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

#414

Post by gambiting »

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.

Around here in the North East of UK you can easily buy a house for around £100k. It won't be amazing or anything, but with banks offering 5% deposit mortgages pretty much anyone can save up for it and get on the property ladder. Of course the situation down south is completely different and the closer you get to London the more impossible it gets to ever buy your house.

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

#415

Post by ricardobayes »

nemo44x wrote: post #319
IG_Semmelweiss wrote: post #308

Earlier quoted context omitted.

Do.you have kids? "Having space and feeling like they can give them a better future" is about 1 thing. Money If you eliminated any of income taxes, or a combination of SS + reducing deficit spending (inflation), or the % of income going to heakthcare by eliminating its employee and employee subsidies (Medicares), there would be a populatiom boom. All you need to do is free people from having to make money, to meet ba…

I think we need to change the income tax code to massively incentivize people to get married and have kids. I’d support increasing the tax rate pretty massively and then introducing a tax deduction of like $20k per kid. For instance a couple with 3 kids and a home would have around $70k-$100k in deductions (60k kids, 10k-40k in state/local taxes etc). If they had an income of $120k it would be adjusted to like $30k a…

Hungary tried exactly that (basically 55-60k EUR/USD free to each couple that said they want 3 kids plus 0% income tax for life for mums) but it didn't work. It was a 0.8% blip but that's it. Maybe it would be different in the US because in europe healthcare and education is already "free".

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

#416

Post by dgellow »

theshrike79 wrote: post #339
erur wrote: post #263

Earlier quoted context omitted.

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…

> There are plenty of cities in Germany with very cheap rent, where apartment buildings get torn down because they're vacant. There are plenty of cities in Finland like this too. But the problem is that the jobs aren't there. I could buy a huge house with a big yard from one of those cities, but then my commute would be over 300km every day. Not really worth it. Or I would have to quit my job and start working in the…

Germany is not that centralized, you have way more options than just Munich if you’re willing to move, unless you’re specifically looking to work for Google. Köln, Düsseldorf, Berlin, Frankfurt, Hamburg, and more all have dynamic job markets if you’re into software. Even for English speakers.

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

#417

Post by Kiro »

peterashford wrote: post #344
satvikpendem wrote: post #195

Earlier quoted context omitted.

What is wealth? How do you define it? How can you tax it? If it's in stocks, what does it mean to tax it? If I own a company worth X billion, does that mean I have to sell my shares to withdraw enough cash to pay my taxes, thereby tanking the value of my own company? If I pay a lot in a downturn but my company does better in a boom, will I get refunded the extra tax I paid? It's not as simple as "make it illegal to h…

"What is wealth? How do you define it?" I think I've done myself an injury from rolling my eyes too hard. Tax departments have this incredibly hard question covered, for some time now

No, they do not have this question covered. Look at the few countries that actually have a net wealth tax and how inadequate their calculations are. This is not a solved problem by any means.

Better luck next time you try to roll your eyes.

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

#418

Post by ricardobayes »

swexbe wrote: post #391
ars wrote: post #380

Earlier quoted context omitted.

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…

No, the problem is that suburbs are the only thing we build anymore. Fresno has doubled it’s population since 1940 while 10x increasing it’s land usage.

Blame instagram and US television programmes for that. Even in Europe now everyone wants a house with a lawn, which is unfeasible and leads to a lot of frustration. Even if you're stuck in an apartment, it has to be "instagrammable", 10 year old kitchens are unacceptable. Oh and you just _got_ to have iPhones, otherwise you're an undateable nobody.

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

#419

Post by wizofaus »

nemo44x wrote: post #172
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…

Why would it collapse? There’s insatiable demand for extreme limited property. Interest rate hikes may lower the price of property but the interest will rise proportionately. Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.

It's not implausible that changes in technology and life/work habits will ultimately make currently highly-attractive areas less so. And once population starts to fall in combination with minimal wage growth it's hard to see what would sustain current high prices. Ultimately it seems the primary driver behind property prices is the willingness of buyers to take on debt and for banks to issue it. If house prices did start to plateau/drop off over a sustained period with no obvious indicators of future growth then that willingness (particularly on behalf of banks) may well drop off pretty quickly too.

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

#420

Post by TheOtherHobbes »

csomar wrote: post #229
nemo44x wrote: post #172

Earlier quoted context omitted.

Why would it collapse? There’s insatiable demand for extreme limited property. Interest rate hikes may lower the price of property but the interest will rise proportionately. Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.

If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming. And housing is expensive by design and not by constraint. I'm staying in KL, a comparatively cheap place by Western standards. The housing market is crap here from a seller perspective as you have an over-supply of condos. That, despite the large a…

A lot of service industry people can't afford a long commute. So even if the property is cheap X hours out, they still can't afford to live there.

And that's how you get what you're seeing in many cities - uninhabited property deserts where the houses/apts are nominally inflating in value, but most people can't afford to live there. And those can afford it don't want to because there's no one around to keep the lights on for them.

Portugal is threatening to repossess empty properties through compulsory purchase. That's drastic and not very popular - especially with property speculators - but govs are going to be faced with a choice between that kind of drastic action and cities which gradually empty of people.

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