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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#351

Post by dan-robertson »

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…

> do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build …?

Sort of? See eg https://www.ft.com/content/dca3f034-bfe8-4f21-bcdc-2b274053f... for some graphs that show Europe vs anglophone countries in an obvious way. Obviously there are lots of differences between the countries, eg the specifics of their planning systems and economies. The US is different because of the big diversity of local governments – housing is more affordable lots of people outside of desirable cities, and places like Austin and Houston do build lots of homes and that seems to be a possible reason they haven’t grown like prices in California.

Credit costs have followed similar trends everywhere (obviously there are differences, especially in the US) and yet house prices have not followed similar trends but rather behaved differently in different places. I agree that when interest rates are lower you should expect to see higher prices, but that’s because interest rates change the price that a given income can afford. I don’t think interest rates are good at explaining the changes to affordability over time, or why affordability is different in different places.

Also, in your linked chart, you see something like 20% more dwellings per person in developed EU countries vs English-speaking countries, which doesn’t feel like no difference at all.

The issue in the article of affordability becoming worse across the US recently is probably interest rate related – prices change more slowly than interest rates, 30-year fixed rate mortgages mean rates change more slowly, and the higher rates mean existing mortgage-payers don’t want to move as they’ll lose their low rate, which reduces supply. I don’t know why prices are still up though – if interest rates being high was making housing unaffordable, one would expect prices to be down.

Re: Priced out of home ownership

#352

Post by aegypti »

tmnvix wrote: post #341
aegypti wrote: post #325

Earlier quoted context omitted.

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.

The difference showing that Ireland, Canada, New Zealand, and the US had either the same, or more dwellings per thousand inhabitants in 2011 than 2022?

I don’t know if I’m just misunderstanding your point, or misreading the material, but that is also not an example of underutilization.

Re: Priced out of home ownership

#353

Post by 8note »

imperfect_light wrote: post #326
tmnvix wrote: post #316

Earlier quoted context omitted.

Worth keeping in mind that the typical measure of the home ownership rate is really a measure of the proportion of people living in a home with the owner. So a 25 year old living with parents counts towards and not against this. Likewise anyone else sharing the house (boarders, etc). I suspect that the number of people in this situation has increased in the past couple of decades due to housing affordability.

The denominator in this graph is houses, not people, so adult children living/not living at home would have no impact.

The numerator is some multiplication of people and houses and people per houses though, with the houses and people counted differently on each multiplier though, so it still matters

Re: Priced out of home ownership

#354

Post by Wytwwww »

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…

> take a look at the numbers for each of the countries I mentioned in the first chart here: https://www.oecd.org/els/family/HM1-1-Housing-stock-and-cons... (Total number of dwellings per thousand inhabitants, 2022 and 2011).

The statistics are skewed because the demand varies a lot between different regions .e.g there are towns in Italy selling houses for $1 (well sort off...) that doesn't mean that housing is affordable in Milan or other major cities. Same Applies to US, Canada, Ireland etc.

Re: Priced out of home ownership

#355

Post by JumpCrisscross »

dahart wrote: post #333
JumpCrisscross wrote: post #280

Earlier quoted context omitted.

> No-one can kick you out of your own home because they want to rent to someone they can charge more Property tax isn’t voluntary and as exogenous as a landlord. (Also eminent domain, to say nothing of most peoples’ mortgages.) > Not everything is a purely financial decision Making the largest leveraged purchase of your life for an emotional comfort object is irrational. That doesn’t make it wrong. But it ceases to b…

You pay property tax either way, it just might be rolled into your rent. You probably have years to pay missing property taxes, while landlords will wait nowhere near that long. Eminent domain is only exercised rarely, and doesn’t even compare to how often rents are increased, or how often people are evicted.

> You probably have years to pay missing property taxes

Anywhere that gives a delinquent property owner years also tends to have strong tenant protections.

Re: Priced out of home ownership

#356

Post by listenallyall »

onion2k wrote: post #247
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?

That definitely wasn't the case in the 1990s through to about 2020. House prices doubled about every 10 years in some areas while interest rates were about 2% on average. Housing has been by far the best small investment open to most people. The problem now is that property buying at scale for the long term is a model private funds are trying, interest rates are going up, and housing supply at the lower end of the sc…

Not disagreeing with the general assessment however let's stick with facts... mortgage rates decreased during much of that period but were still above 6 through most of the 90s and even at the lowest, didn't get all the way down to 2.0%

https://fred.stlouisfed.org/series/MORTGAGE30US

Re: Priced out of home ownership

#357

Post by tmnvix »

Chris2048 wrote: post #345
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…

> why are building materials and tradespeople also at sky-high prices (in Ireland)?

Similar issue in NZ. Cost of building materials was getting extreme. There's an argument to be made that these are linked to profitability of building and so increased during the speculative boom. Helped along by the fact that many suppliers are monopolies. Cost of building materials has however started falling considerably since the property market crashed here. Likewise the cost of labour and building quotes overall.

Re: Priced out of home ownership

#358

Post by Plasmoid »

jayski wrote: post #339
FactKnower69 wrote: post #310

Earlier quoted context omitted.

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…

so could this be resolved by having a high tax (~50%) on second/rental/investment homes?

So... where would renters live?

Re: Priced out of home ownership

#359

Post by NegativeLatency »

shuckles wrote: post #318
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…

> People intuitively jump to the conclusion that the problem is caused by a lack of building. In my experience, people "intuitively" jump to basically every conclusion besides this one. "Greedy landlords" or "[favorite scapegoat] collusion" are intuitive conclusions which are far more common than supply and demand. > Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same ina…

I only have firsthand experience in the US but it makes a lot of sense to me that the influence of colonization by Britain would cause all of the listed countries to have similar issues related to land use.

Re: Priced out of home ownership

#360

Post by Chris2048 »

speeder wrote: post #104

I live in Portugal and here the situation is outright ridiculous. 1. There are a ridiculous amount of abandoned properties, when I walk the streets of major cities, sometimes more than half of the buildings even in expensive areas are boarded-up. 2. Meanwhile I am afraid of being homeless soon, I lost my job recently, and the unemployment benefit I can receive is literally half of my rent. Thing is, there is no "wors…

> when I walk the streets of major cities

Portugal has started offering financial incentives for restoring properties, but I'm surprised this is a factor in Major cities, which ones do you see this? Is it also an issue in Lisbon?

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