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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#391

Post by Glyptodon »

jachee wrote: post #309
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…

> This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence. I've believed for a long time that heavily taxing income from second+ properties, similar to capital gains, would help reduce rent-seeker hoarding, to help free up and reduce the cost of properties for primary-residence owners.

Thing is, rental buyers really only make out well because they can rent places for more than their purchase/mortgage equivalent. If supply were large enough, I'd think rental rates below the average monthly mortgage payment would be more widespread and tend to make rental property ownership less appealing.

Re: Priced out of home ownership

#392

Post by [deleted] »

atemerev wrote: post #40

Pff, in Switzerland, the mean age of the first-time home buyer is 48, and the mean age of a homeowner is 58. And those are the luckiest and the richest who could actually afford buying a house; many rent for life.

[deleted]

Re: Priced out of home ownership

#393

Post by itake »

screye wrote: post #304
whoknowsidont wrote: post #196

Earlier quoted context omitted.

That's not the problem at all. Stop allowing people to buy multiple homes. Stop allowing landlords to "collaborate" on prices.

Both are band aids for the real problem. Housing can't both be an investment and a basic need. You need to pick one or find an opinionated middle ground. If housing is an investment, then remove all protections and open up the supply. No height regulations, no minum parking regulations, no mandatory HOAs. No moratoriams or legal protections when loans default. If housing is a need, then regulate it like a limited res…

e: if you don't agree with my idea, please comment why instead of down voting.

--

> Housing can't both be an investment and a basic need.

Housing as investment is a beautiful solution to how many people fail to properly save for retirement. For many people entering retirement, their home is a huge part of the investment portfolio, because they always made sure to make that payment.

If properties didn't appreciate, old people would not have the assets to retire on, then what?

Re: Priced out of home ownership

#394

Post by AlexandrB »

WalterBright wrote: post #361
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…

Two more causes: 1. People have mortgages with very low interest rates. If they sell the home, they give up that cheap mortgage for a much higher mortgage interest rate with the next home. So, they stay. 2. The capital gains tax exemption of $500,000 has not risen with inflation. Selling your appreciated home will result in a large tax bill. It makes sense to sit in the home until you die, then it gets a basis boost…

> 1. People have mortgages with very low interest rates. If they sell the home, they give up that cheap mortgage for a much higher mortgage interest rate with the next home. So, they stay.

This may be true only in the US. In Canada, for example, the maximum term a mortgage rate is fixed for is 5 years, after which you have to "renew" your mortgage and renegotiate the rate. So a lot of people are already being forced into higher interest mortgages here.

Re: Priced out of home ownership

#395

Post by rcpt »

itake wrote: post #382
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…

While I agree building housing is a symptom, and not the core problem. But I'm skeptical that increasing building or density would actually lower housing costs. If that were true, high dense cities like Beijing, Tokyo, Singapore, or Hong Kong would have much lower cost housing. Housing more people in a concentrated area creates more demand for services, which creates more demand for housing which jacks up prices. Pac…

Beijing, Tokyo and Singapore are not that expensive to live in. Especially if you're renting.

Hong Kong has all sorts of crazy building restrictions and is a different story

Re: Priced out of home ownership

#397

Post by tap-snap-or-nap »

Sydney has the capacity to build a highrise crown casino at the city centre then why can't they hire the same builders to continue building residential 3BDR-4BDR homes in the suburbs which will also allow locals to have children. I believe the pricing of various things involved is insane and not where it should be to allow this to materialise. The rents, insurance, wage bills and capital cost seems to be the major bottlenecks.

Re: Priced out of home ownership

#398

Post by elevatedastalt »

atemerev wrote: post #40

Pff, in Switzerland, the mean age of the first-time home buyer is 48, and the mean age of a homeowner is 58. And those are the luckiest and the richest who could actually afford buying a house; many rent for life.

I am not sure that a tiny country that's smaller than 40 US states is a useful model for what kinds of homeownership can work.

Re: Priced out of home ownership

#399

Post by WalterBright »

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…

A lot of houses are empty simply because they are for sale. It's not unusual to take 6 months to sell.

Nobody is going to want homeless people living in it in the meantime.

Houses are also "empty" while they are undergoing renovation.

Re: Priced out of home ownership

#400

Post by Glyptodon »

whoknowsidont wrote: post #338
csallen wrote: post #283

Earlier quoted context omitted.

How is restricting supply not a problem? The fewer houses there are to buy, the higher prices will get, because there are more people competing for less.

Because the U.S. doesn't actually have a supply problem, despite this often getting repeated. U.S. construction of homes has actually kept up with population growth and moves, by every conceivable metric. What IS happening though is that landlords (private and corporate) "warehouse" units constantly to artificially restrict supply and demand, and they do it in collaboration with each other. Every single city and stat…

Taxing land vacancy or lack of density seems like an easy enough solution.
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