71–80 of 166 posts
Earlier quoted context omitted.
Strictly speaking, rents (for long term rentals) can be an indicator of a shortage of available housing, but not necessarily a shortage in the total housing stock.
What's the difference between > shortage of available housing and > a shortage in the total housing stock. I dont think there is any.
Earlier quoted context omitted.
> If you're, say, Austin Matthews making $13MM per year in Toronto, you can still buy a lot of houses. If you look at the statistics, the houses in Canada aren't being bought up by rich people, they are being bought by middle and upper-middle class Canadians. Even the "investors" tend to be individuals buying one housing unit as an "investment". > The US housing market crashed back in 2006 because tech started showin…
> the houses in Canada aren't being bought up by rich people, they are being bought by middle and upper-middle class Canadians. Sales don't happen in a vacuum. The middle and upper-middle have to pay that much because second in line is willing to pay almost as much. Matthews could make an offer of $999,999 on every house for sale in Toronto. He may not get any of them in the end, but in doing so he forces you to pay…
Sure, but your examples don't make any sense. Matthews isn't bidding $999,999 on every house. Nor will sellers agree to $2 just because there aren't other buyers.
Property taxes are actually quite low in Toronto compared to other cities. $6k per year on a $1M house is pretty low carrying costs that will prevent you from taking a $999,998 loss.
> To stick with the hypothetical for the sake of illustration, let's say Matthews was making such offers but now is enthralled by some AI startup in Montreal instead
But the overlap between home buyers in Toronto and tech investors who do seed rounds in Silicon Valley is very small, especially for entry level homes.
Gary Stevenson [0] is the only economist who makes sense to me on this issue. He mostly speaks about the UK but we're basically all in similar boats with house prices across the English speaking world. Gary put his money where his mouth is, and was the world's most successful trader for three years running. However, since he talks in a candid and coherent manner about inequality and the stunts the ultra-wealthy pull,…
Very good video. The quote that stood out to me was „This is what happens when a country has basically given up on taxing the rich“. I wonder why this is happening all over the planet. Shouldn’t there at least be some countries that try to remedy this? Why do ALL the countries have given up on taxing the rich, when, just ~100 years ago, we had massive taxation on wealth even in the US?
Also there is a pretty long history of opposing the rich and standing up for the "people" being a fast track to assassination
> Ireland had arguably the world’s largest housing bubble and crash in the 2000s, with prices quadrupling in the decade to 2007, even while supply soared , before crashing by more than half between 2007 and 2012. (emphasis mine) That wasn't the accepted wisdom at the time. Prices going up spelled 'supply shortage' to most. When the tide went out (i.e. credit availability) it revealed an oversupply. We should learn fr…
They even have a history of going after people's private retirement savings after the fact - https://www.oireachtas.ie/en/debates/question/2024-02-22/119... - and I have ZERO confidence they won't simply steal people's retirement savings when convenient. How else are they going to bail out the farmers destroyed by climate change? (See the IFA's recent complaints about the "weather" that they caused)
""" It was charged on the market value of assets in pension schemes held on 30 June in each year at a rate of 0.6% (2011 to 2013), 0.75% (2014) and 0.15% (2015)."""
Not to mention that the companies handling retirement plans, etc. have gotten used to ripping off the whole country for ages because there were no better options. Want to put €100 in to a retirement plan? Well, we're going to take €5, just because, and also 1% of your investment every year, all so we can underperform a simple index fund (thankfully you can't invest in good index funds in Europe because the US ones won't file a KID form).
BUT! Your primary residence? You can sell that for 10 million more than you paid for it and not owe a cent in taxes. Too bad for all the chumps who rent and have to invest in the market!
I wonder why everyone puts their money in houses? It's an absurd ripoff of a country in every way.
Earlier quoted context omitted.
Kiwi checking in ... crossing fingers we're not about to enter the crash stage, but certainly the contrast in the past 2-3 years from property just flying out the door (low interest rates) to now (high-ish interest rates, lots of low rate mortgages rolling over) are very stark. Auction clearance rates are well, well down. Lots of houses getting passed in at auction which would have been unthinkable a few years ago. S…
We have just gone back to landlord welfare with tax durable mortgages possible. We are also circling in on having the country borrowing money to pay for such policies, while also trying to squeeze in tax cuts. The attitude to housing here is just gross. No major party is interested in changing it. I find it very hard to imagine this government (or any other in living memory) letting the housing market drop significan…
A full on crash would be ugly. No matter what part of society you live in (well maybe except the 0.1%).
Labour did a pump and dump on immigration to make the books look a (tiny) bit better). National well, yes..
Earlier quoted context omitted.
Kiwi checking in ... crossing fingers we're not about to enter the crash stage, but certainly the contrast in the past 2-3 years from property just flying out the door (low interest rates) to now (high-ish interest rates, lots of low rate mortgages rolling over) are very stark. Auction clearance rates are well, well down. Lots of houses getting passed in at auction which would have been unthinkable a few years ago. S…
Is the high migration popular given housing price effects?
Some other people are willing to justify it (eg coming from the bay area). But I think the reality once they get here is different - about 3-4 years ago I was running a software co that was recruiting a bit of overseas people for the skills we needed, we started to get a few that would leave the country after they realised 'maybe the grass isn't greener'
Earlier quoted context omitted.
Do you think there can only be shortages if there's price fixing? If not, please give an example that doesn't involve price fixing. I'll give an example for my argument: If there's only enough food for 90 people out of 100 today, it's easy for anyone with enough money to get fed, but it is also a shortage of food.
> Do you think there can only be shortages if there's price fixing? Clearly not. I just got finished pointing to government intervention as the most likely reason for a shortage. How did you manage to not finish reading the comment before replying? Price fixing can also theoretically lead to a shortage, but this is the least likely case. Usually price fixers want to push the price higher than buyers are looking to sp…
Therefore I will ignore price gouging laws because that's a form of the above but also if reasonable they won't apply to a person selling their own single allocation.
> In this scenario, eventually no amount of money can buy food. You could be the richest person on earth, willing to spend every last cent you have, but you're still not eating if you happen to come late to the party.
If you come after everyone eats for the day then that's not a shortage by my reckoning. Price works just fine as long as you're not insisting on being served between meals.
It's not like you can expect to buy a house in less than a day no matter your budget.
So I still don't see a big difference here between 90 meals and 90 houses for 100 people. There's always a price that will get you one.
> Ireland had arguably the world’s largest housing bubble and crash in the 2000s, with prices quadrupling in the decade to 2007, even while supply soared , before crashing by more than half between 2007 and 2012. (emphasis mine) That wasn't the accepted wisdom at the time. Prices going up spelled 'supply shortage' to most. When the tide went out (i.e. credit availability) it revealed an oversupply. We should learn fr…
> Demand comes in two forms. Demand for housing and demand for property investments. We should not lose site of the drivers of the second type of demand. Has the US ever lost sight of the second kind? To me (as someone who feels hopeless about home ownership) that seems to be the only demand we care about. There’s barely anything new being built, constant blocking by NIMBYs, and investors buying up so much property w…
Honestly, I figured this was gonna happen after Covid, when we finally bought (in a good area, but a small house for far too much money).
However, here we are almost three years later, and prices have again increased such that I'm looking at a nominal gain of like 10% (now obviously inflation played a role, and we've put a bunch of money into the house).
The irish housing market just defies all understanding. We have whole areas of the capital city where the median price of housing is 650k euro, when the top 10% household incomes start at about 100k, and you can only borrow 4 times (for the last year or so) of your total household income.
It. Makes. Absolutely. No. Sense.
And this insanity cost me a bunch of money as I didn't purchase in 2019 because prices seemed too high.
Something something markets irrationality, me solvent.
> Ireland had arguably the world’s largest housing bubble and crash in the 2000s, with prices quadrupling in the decade to 2007, even while supply soared , before crashing by more than half between 2007 and 2012. (emphasis mine) That wasn't the accepted wisdom at the time. Prices going up spelled 'supply shortage' to most. When the tide went out (i.e. credit availability) it revealed an oversupply. We should learn fr…
Rising prices will usually indicate a supply shortage, but for property there's also the element of speculation. In contrast, rents are a more reliable indicator of a shortage, no speculation there.
You'd think so, wouldn't you?
However, again the Irish market disproves this to some extent.
So generally you look at rents as a 12-14 year payback window of the house price (for investment). What happened in Ireland in the last decade is that rents increased, such that investors could pay more for houses, which increased rents etc etc.
Like, there's all this purpose built accommodation in Dublin that's sitting empty because they want 3k euro for a two bed apartment. For reference, a top 5% taxpayer would clear about 6-8k euro per month, so those prices are entirely out of whack with what people can afford.
But because it's all private capital, it's mark to myth so many of these apartments are empty. I work near the Central Bank, and there's loads of gorgeous six-eight floor blocks of apartments, all of which are entirely empty while we have far too many homeless people.
Earlier quoted context omitted.
> wages are lower That may be true, but houses aren't that expensive. If you're, say, Austin Matthews making $13MM per year in Toronto, you can still buy a lot of houses. That capacity is not diminished by some tech mogul in SF making $130MM per year. The question is, as always, will something better come along? Indeed, housing is the purchase of last resort. Give people something better to buy and they will! People…
> The US housing market crashed back in 2006 because tech started showing promise ("Web 2.0", mobile shortly thereafter) and the money left housing to buy into the newfangled tech. This is definitely the first time I’ve read this. Do you have more info on that?
This would be a particularly unique explanation for the bursting of property bubbles all over the world (like, does this also explain the Irish property bubble crashing?).