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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#341

Post by tmnvix »

aegypti wrote: post #325
tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

The OECD link you’ve provided shows the complete opposite of your point. The UK, Ireland, Canada, and New Zealand are at the bottom of % vacant dwellings indicating the opposite of underutilization.

It's the difference between 2011 and 2022 that I was highlighting.

Unfortunately the document doesn't show changes in vacancy rate.

Re: Priced out of home ownership

#342

Post by phoehne »

andrewl-hn wrote: post #299
phoehne wrote: post #188

Earlier quoted context omitted.

I'm not sure if it's the case in your location, but sometimes foreign buyers come in and buy properties they don't expect to inhabit (unless something goes really bad in their country). Europe and the US have strong rule of law systems that prevent the state from just taking property. (The government charging you with a bogus criminal charge to justify taking their property in in their home country). It's also an ass…

Blaming foreigners is the trick local politicians love to use, but - at least in Portugal - very few properties are foreign-owned. Instead, people are reluctant to rent properties out in general. Real estate agents struggle to convince owners to put their properties on the market in a first place. Usually a family member dies or moves abroad and their relatives simply keep the place unoccupied. Often to convince them…

As I said, it's not always the case. But in some cities there are shuttered properties, in sometimes prime locations, that are held by non-residents. In some places, like London, it's literally a money laundering who's who. Carrying costs discourage just holding on to property. (I don't know if Portugal has taxes on real property). Increase the carrying costs and the incentive is to rent or sell. That being said, you can't do much about the location of the mountains or the sea.

Re: Priced out of home ownership

#343

Post by dicudbxbwv »

FactKnower69 wrote: post #310
tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

1000%. I will never get tired of teaching people (it's news to every single one of them!) that at any given time, there are more than 20 empty housing units in the United States for every single homeless person on the street ( https://www.self.inc/info/empty-homes/ ). There is not , nor has there ever been , anything resembling a "housing shortage". We live in a post-scarcity world as far as housing is concerned, and…

Are you ”teaching” that because some 2% of housing units are empty we don’t have a shortage? Because I don’t think any of economy, capitalist or not can reasonably obtain 100% use of any resource. 98% is pretty dang efficient and I think is actually a counterpoint to what you’re trying to argue.

Re: Priced out of home ownership

#344

Post by aeyes »

FactKnower69 wrote: post #310
tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

1000%. I will never get tired of teaching people (it's news to every single one of them!) that at any given time, there are more than 20 empty housing units in the United States for every single homeless person on the street ( https://www.self.inc/info/empty-homes/ ). There is not , nor has there ever been , anything resembling a "housing shortage". We live in a post-scarcity world as far as housing is concerned, and…

If this was true you should be able to build a new house for much less than the asking price for existing houses but unfortunately that is not the case either.

Re: Priced out of home ownership

#345

Post by Chris2048 »

tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

> look at the numbers for each of the countries I mentioned in the first chart

The number is irrelevant - people want to live in desirable areas where's there are jobs, and are constrained as such. Rebuilding high density in towns and cities is an issue, as well as maintaining decent services ( hospitals, roads, public transport, post office etc).

You say that houses are being treated as investments, that's why these crises happen; but then why are building materials and tradespeople also at sky-high prices (in Ireland)? Is it all competition on investment building?

Re: Priced out of home ownership

#346

Post by cm2187 »

fairity wrote: post #208

I don’t get articles like this. It’s arguably a better financial decision to NOT buy a home, and park your downpayment in a broad based index fund. I get that there are arguments for or against, but there doesn’t seem to be a clear financial advantage to home ownership. So, what’s the big fuss about? Just pay rent and carry on? Surely, there are better things to focus on?

Depends when. A home is a leveraged investment, plus often exempt from capital gain taxes. If you bought it at the beginning of a large real estate bull market you probably did better than an unleveraged investment in the S&P.

Re: Priced out of home ownership

#347

Post by callalex »

Pet_Ant wrote: post #67
jeffbee wrote: post #59

None of the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies — will lower costs. Every one of them will raise prices. You can only fix this with supply: build homes.

One of the key factors is the increased migration for China and India. While people did emmigrate before, it was much lower. So effectively they were walled off into their own pocket. Now, most of my co-workers are immigrants from India. It's like the rest of world's population is jumping by 2 billion. That is going to change the value of everything related to populations and living.

Got any numbers to back up this claim?

Re: Priced out of home ownership

#348

Post by spacemark »

NoLinkToMe wrote: post #295

Honestly I'd love for some good data, rather than cherry-pick journalism. It's crazy how many news articles will simply parrot a narrative without actually investigating it. The discussion on housing should start with one fact: the supply of housing has been growing faster than the size of the population, decade after decade, for a very long time. This is why the number of people per home, has been dropping decade af…

I agree with a lot of what you are saying, but to say it is easier to buy a home now than at any time in the past is objectively untrue. Yes, houses today are much better than 50 years ago, but the cost to entry has gone up faster than salaries. When my parents bought their first home, the median salary-to-home cost ratio was roughly 1:1. It is closer to 1:6 today. Yes homes are more valuable today, but they are also objectively more difficult to purchase.

Re: Priced out of home ownership

#349

Post by carlosjobim »

erickf1 wrote: post #233
lr1970 wrote: post #181

Earlier quoted context omitted.

> It perplexes me, and the rest of our neighborhood, how someone can float a mortgage, much less an investment mortgage, without a renter. In the USA it is happening all the time because, surprisingly, landlords have little skin in the the game. LLC is the name of the game. Each investment property is "owned" by its own LLC that bares 100% of risks and liabilities associated with the property and shields the landlord…

Landlords have 100% risk. Look what happened to California, when the state said tenants did not have to pay rent. Same for Washington, NY, IL, etc... The vast majority of people with rental properties are just regular people trying to make a living.

The majority are not regular people trying to make a living. They are old people trying and succeeding in getting rich by doing nothing.

Re: Priced out of home ownership

#350

Post by djbusby »

postalrat wrote: post #194
DGAP wrote: post #180

Stop subsidizing demand at the national level. Stop restricting supply at the local level.

Land is cheap but building a house is expensive. If you want more supply then you are going to need to make building more economical.

In King County WA the assessment would have two line items.

    Land: 500,000
    Improvement: 300,000
They tax that at $800,000
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