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Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

architectsjournal.co.uk

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Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#191

Post by StopDisinfo910 »

nly wrote: post #162
StopDisinfo910 wrote: post #112

Earlier quoted context omitted.

> Which are for a lot of people their only form of savings? It's fake savings unless you are speculating on properties. Most people only own the place they actually live in and only resell to buy another place. A general property market crash doesn't affect the value of your house compared to other house so it's mostly neutral in this regard. Of course people who borrowed before the crash will be in debt for longer t…

It's not neutral if you've borrowed to buy the home... If you're in negative or reduced equity your mortgage costs can increase dramatically when you refinance. This alone can easily cripple a large % of the population and tank the consumer economy

Depends of where you live. Fixed rates for full duration are standard in a lot of Europe. You never refinance unless it’s winning for you.

Forced variable rates are a scam.

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#192

Post by StopDisinfo910 »

Eddy_Viscosity2 wrote: post #157
AstralStorm wrote: post #144

Earlier quoted context omitted.

It's an interesting way to try to save, and assumes anyone will want and be able to buy it. And that you will be able to keep the expensive property with expensive costs. Plus compare if living in the expensive vs cheap place gets you more savings... No, it does not make sense. I can see holding a property for a child, but not as retirement.

You misunderstand I think. When you retire you sell the expensive property and then buy a less expensive property in a cheaper area. If retired, then potentially have fewer restrictions on where you live because you don't have to commute to work any more. The difference in property costs between the old and new areas is your nest egg.

You will still earn the difference between the expensive property and the less expensive one. It will just be a lot less and that’s a good thing.

Using properties as store of value or betting on them becoming more expensive have too many externalities.

Your case for exemple is directly leading to people actually living and working in the less expensive places being displaced by retirees from the city which is very much undesirable for local life.

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#193

Post by graemep »

scoofy wrote: post #163
graemep wrote: post #31

Earlier quoted context omitted.

> If houses ever return to good affordability I'm screwed. Which creates a huge pool of people who are opposed to making houses more affordable.

The key here is incremental development. So, I'm really into municipal finance and fixing the housing crisis, which got me into Strong Towns. There is a solution, but it's not one that is going to make everyone happy (obviously), it is the state facilitating or even gently subsidizing incremental development. If everyone is, by right, allowed to build the next larger "unit" of housing (for simplicity's sake, suppose…

This is what the planning system in the UK prevents. It is complex to get permission to build, so it is done by property developers of landowners and for one large site at a time.

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#194

Post by globular-toast »

dustincoates wrote: post #47
globular-toast wrote: post #27

Earlier quoted context omitted.

> If houses ever return to good affordability I'm screwed. Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. > I have to refinance every 5 years, because that's the game in the UK, so if rates spike I'm also screwed. This is the real problem. It's partly our fault, of course, for agreeing to a mortgage which we couldn't afford if…

> Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. I don't know how it is in the UK, but in Paris, I hear from a lot of people that their retirement plan is to sell their Parisian apartment and move to a lower cost area with what they've gained. Doesn't work out if your "investment" is underwater.

If the Parisian apartments become undesirable and the low cost areas become desirable then, yeah, it wouldn't work out. But that's not what we're talking about. House prices going down across the board makes no difference. You sell your apartment for a lower number but you buy the new place for a lower number too.

The numbers are just made up and don't matter. You can't eat a number and it won't keep you warm or dry. It's so weird to me that even in a place like this people can't see beyond the numbers.

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#195

Post by milesrout »

bendigedig wrote: post #189
milesrout wrote: post #185

Earlier quoted context omitted.

Heavily subsidised rent

Not necessarily, it depends where you live. Remember that market rents are higher than they need to be due to the artificial scarcity imposed by a NIMBY-friendly planning system and the inaction of successive Governments who have chosen to look the other way. And who would do the cleaning and serve you coffee if social housing didn't exist? It might cost you a lot more.

I agree that supply is constrained and rents are higher than they should be.

The solution is to free up the supply of land and allow people to build, to bring down prices for everyone.

The same people would do the cleaning and serve coffee as do now, because they don't live in social housing.

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#196

Post by spwa4 »

robocat wrote: post #170
spwa4 wrote: post #167

Earlier quoted context omitted.

... and that's exactly what people want to keep (the shortage) because that's their pension. That is why they won't end up on the street in 20 years. Any attempt to fix the housing situation will need to provide owners, not just with housing, but with a passable income for 40+ years. So, the actual discussion is this one: https://www.youtube.com/watch?v=747X0M7Keyw And this discussion is hard because to just maintain…

> the reason is that the pensioners refused to have enough kids I thought they did have enough kids but that the next generation(s) need to breed faster. In New Zealand and Australia ~30% of population were born in another country. I suspect our government will try and fix the working-age population hole by more immigration? New Zealand is building houses (necessary when increasing population by 50% through immigrati…

> It is silly to plan your retirement by looking at the situation right now. The economics of demographics will require grim changes.

This is doom talk. Of course it isn't. One thing is for sure: you are going to be responsible for your own retirement, because superannuation is only meant to drive up house prices and will collapse along with house prices ... "eventually". It may not be clear when exactly this will happen, but of course in Australia it will have to happen near 2054 (when Australia's population growth will go into reverse until at least 2084).

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#197

Post by Eddy_Viscosity2 »

StopDisinfo910 wrote: post #192
Eddy_Viscosity2 wrote: post #157

Earlier quoted context omitted.

You misunderstand I think. When you retire you sell the expensive property and then buy a less expensive property in a cheaper area. If retired, then potentially have fewer restrictions on where you live because you don't have to commute to work any more. The difference in property costs between the old and new areas is your nest egg.

You will still earn the difference between the expensive property and the less expensive one. It will just be a lot less and that’s a good thing. Using properties as store of value or betting on them becoming more expensive have too many externalities. Your case for exemple is directly leading to people actually living and working in the less expensive places being displaced by retirees from the city which is very mu…

> being displaced by retirees from the city

This is true, but it also creates vacancies in the cities. The retired have to live somewhere..

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#198

Post by robocat »

morellt wrote: post #115
carlosjobim wrote: post #87

Earlier quoted context omitted.

Renters do not want justice or fairness. They want to one day become landlords and themselves suck the blood of the young and healthy. "A slave dreams not of freedom, but of his own slaves."

^^^ this I don't think people consider the fact that a very good portion of these landowners were once renters that worked their way up and don't want to make it easier for the ones who have to do the same after themselves. It's easy to point fingers from the bottom until suddenly you're looking down from the top and the view ain't that bad

> It's easy to point fingers from the bottom until suddenly you're looking down from the top and the view ain't that bad

I wish we had specific words for this type of hypocrisy. Seeing people in wealthy USA complain about people relatively wealthier than them, rather than looking at their own wealth versus the poor in other countries. Obviously the poor in the USA aren't living the life of Reilly, but they're far beyond the wealth of the poor in India. How wealthy were the 99% Occupy Wall Street protesters?

You can't make people see what they don't want to.

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#199

Post by robocat »

spwa4 wrote: post #196
robocat wrote: post #170

Earlier quoted context omitted.

> the reason is that the pensioners refused to have enough kids I thought they did have enough kids but that the next generation(s) need to breed faster. In New Zealand and Australia ~30% of population were born in another country. I suspect our government will try and fix the working-age population hole by more immigration? New Zealand is building houses (necessary when increasing population by 50% through immigrati…

> It is silly to plan your retirement by looking at the situation right now. The economics of demographics will require grim changes. This is doom talk. Of course it isn't. One thing is for sure: you are going to be responsible for your own retirement, because superannuation is only meant to drive up house prices and will collapse along with house prices ... "eventually". It may not be clear when exactly this will ha…

> doom talk

Perhaps easier to say in Australia: Australia seems to be doing better than many countries so perhaps you don't recognise the problem. Japan and Italy already have some ~$0 houses due to demographics. Children from New Zealand go overseas so demographics in NZ are worse than Australia. An article[1] this morning asked: "Have you seriously considered moving to Australia in the last year?" 37% said YES (and 40% of those have 'looked into it').

This thread is started by nly in London who clearly hasn't retired yet:

  My mortgage runs until I'm 70 and I, like most owners now, are entirely dependent on the housing casino game continuing. I have to refinance every 5 years, so if rates spike I'm also screwed.
Here's a different view of the demographics story in the UK: https://m.youtube.com/watch?v=ouC7yLLZqkc

And here's a proper doom animation for Korea: https://m.youtube.com/watch?v=Ufmu1WD2TSk

Try to ignore the bullshit in both but do attend to the facts.

I'm over a decade away from retirement in New Zealand, but all the signals I see here are pointing towards the country taxation base not being able to afford retirees in the future. I haven't considered Australia yet since I assume Oz won't escape the demographic wall, and if there is a future problem then being a kiwi in Oz could become unpleasant.

The narrative a year ago was that we should invest a good proportion of retirement savings into the US stock market. Recent events indicate that might not be an effective long term strategy.

A rental property was the traditional investment vehicle goal for many New Zealanders - but I've been becoming more sceptical about that idea (even though I've seen the past success).

I've no idea what the solution is, but I'm certain that the strategy that worked for my parents won't work for me.

[1] https://www.stuff.co.nz/travel/360652106/kiwis-living-london...

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

#200

Post by raffraffraff »

rwmj wrote: post #98
raffraffraff wrote: post #86

Earlier quoted context omitted.

If you're not planning on selling your house it's future value is irrelevant. All I care about is the purchase price of my "forever home". The only difference it makes it that if your lender gives more favourable interest rates when your loan to value ratio improves. So if you purchase a house and the price doubles, your LTV is already 50%. Conversely if it drops after you paid off half the mortgage, your LTV might b…

I'm not sure if the thing about LTV is true considering the whole picture, since the loan is larger. A larger loan at a lower interest rate still has large monthly payments. (I'd have to do the maths to be sure ...)

I looked up one of the major banks in my country and the difference in mortgage rates and monthly repayments for different LTV ratios is as follows for a €500k property with €50k down payment:

    LTV 80%: 4.15% €2762pm
Over the lifetime of the loan you'll spend roughly half of the time paying the upper rate and half paying the lower rate.

However, if, over the first 10 years of the mortgage, your house halves in value due to a recession then you won't break the 50% LTV mark until year 15 (2040).

On the other hand, if house prices were to increase by 50% over that period then you might hit the 50% LTV mark within 7 years (2032).

The difference between the total mortgage interest in these two scenarios is €9216. The only thing that changed was the valuation of the home.

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