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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#561

Post by xur17 »

alex_duf wrote: post #302
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?

Surely you can see the difference between giving away a significant portion of your income to your landlord, or paying towards your mortgage. In one case you can sell your property and get your money back, so you can decide to do whatever you want with it (like index fund if you so chose). And in the other it's your landlord who's either paying their mortgage with your money, or placing it in said index fund...

While true (the landlord is obviously making money, otherwise they wouldn't be doing it), there are other variables worth considering.

If you decide to move, you pay 6% in real estate fees (extortion) to sell / buy. If you rent, the house never changes hands, and hence this fee isn't paid.

Re: Priced out of home ownership

#562

Post by AlexandrB »

SV_BubbleTime wrote: post #496
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.

> Stop allowing landlords to "collaborate" on prices. lol. Yes, I remember at the 2022 landlords meeting we all decided to raise rents… because we never thought of that before!! Surely it has nothing to do with taxes and inflation, no, as a renter you should be shielded from that and we should pay it without passing it on!

You're literally describing something that happened - with a fig leaf of "algorithm" to (unsuccessfully) try to keep things legal.

https://www.propublica.org/article/yieldstar-rent-increase-r...

Re: Priced out of home ownership

#563

Post by downrightmike »

EduardoBautista wrote: post #123

Why doesn't the government build and sell housing at a small profit? Here in Dubai, the largest housing construction companies are or were government owned. It's one of the ways the government can have zero income tax despite oil being less than 1% of its economy. My only thought is that it's political, and some voters don't want their houses to lose value.

That's because the state employs most people, they have an interest in keeping people's costs down. The people depend on the state for their livelihoods.

Re: Priced out of home ownership

#564

Post by downrightmike »

vouaobrasil wrote: post #2

Where possible, states should build more tiny house communities, or have land where putting up a tiny house is legal and pain-free. There should also be a law prohibiting a person from owning more than one of them, except for temporary periods of moving out of one and into another. (The same should hold for regular houses, too.) Effectively, land is a different sort of commodity than most others: it is truly finite,…

We used to just have boarding houses, apartment buildings for this sort of thing.

Re: Priced out of home ownership

#565

Post by lostemptations5 »

itake wrote: post #414
rcpt wrote: post #395

Earlier quoted context omitted.

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

The article is specifically about purchasing homes. Even the USA, it also is cheaper to rent than to buy. Buying a home in Singapore has a 6 year waiting list to access public housing with properties exceeding $1m SGD. Taxes, Transportation and food costs are cheap, but property is not.

Singapore is not really typical of anything anywhere, it's a small island nation with insane population pressure with regards to housing.

Almost any other Asian city from Bangkok to Ha Noi has room to expand. In fact speaking of Bangkok buying a condo there is widely considered a bad investment because there is so much supply.

Re: Priced out of home ownership

#566

Post by aegypti »

tmnvix wrote: post #475
aegypti wrote: post #352

Earlier quoted context omitted.

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.

My point is that the relatively static proportion of people to dwellings in those countries over that period suggests that a supply shortage is not sufficient to explain the accommodation crisis. What I am suggesting is that incentives to invest in property have led to an increase in the number of properties that are not being used as a primary residence (i.e. are underutilised) and that that is the most significant…

I see now through a US & REIT centric bias, I think.

Given a market like NZ’s size, growth/prices, and attractiveness I can see demand like speculation, STRs, and 2nd homes possibly affecting utilization more than supply.

Given US markets that are larger, cheaper, and less attractive where investment properties fueled on cheap credit were rented out or to a much smaller degree flipped, it’s truly, significantly more difficult to imagine vs simple lack of supply (especially given historically low US rental & homeowner vacancy rates).

Re: Priced out of home ownership

#567

Post by strken »

dzhiurgis wrote: post #451
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…

> is there maybe some other common cause? Immigration. It's not that immigrants buy up the houses (opposites, we tend to live cramped up in flat shares). It's that they support landlords profits (with cream on top of not knowing your rights) and have overall pressure on market. Building should at least match immigration/population growth. Also not building dense enough. Kiwis always tout "I wouldn't wanna live in a h…

The underappreciated problem with immigration is that it allows advanced economies to cover up issues that make raising kids difficult. A shrinking population crashes the housing market. A growing population powered by immigration rather than birth rate props up the housing market.

Re: Priced out of home ownership

#568

Post by SV_BubbleTime »

AlexandrB wrote: post #562
SV_BubbleTime wrote: post #496

Earlier quoted context omitted.

> Stop allowing landlords to "collaborate" on prices. lol. Yes, I remember at the 2022 landlords meeting we all decided to raise rents… because we never thought of that before!! Surely it has nothing to do with taxes and inflation, no, as a renter you should be shielded from that and we should pay it without passing it on!

You're literally describing something that happened - with a fig leaf of "algorithm" to (unsuccessfully) try to keep things legal. https://www.propublica.org/article/yieldstar-rent-increase-r...

That sure seems like an article written to rile people up who want to be riled up.

Let’s use simple reason here…

If there isn’t enough supply, rates will go up, coordination or not.

If there is no supply issue, landlords who conspire to raise rents will be immediately undercut by those that do not.

Article makes allegations, and nothing came of them. It’s not illegal to call and ask prices. Prices that they’re “agreeing on” were all what people were paying.

Re: Priced out of home ownership

#569

Post by scubadude »

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

I don't know about the others, but we're building about 50% of what we need for Australia's population growth. Neo-liberalism has resulted in decades of de-funding of public education, which trains tradespeople, and now we have a shortage of tradespeople. And we're getting another tax cut in a few weeks so I guess that problem, plus all the others with same cause, is just going to get worse.

Re: Priced out of home ownership

#570

Post by dangus »

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…

> By definition, only investment properties can be underutilised - owner occupied homes are occupied!

I think this part is what kills the anti-investment argument. If we hypothetically got rid of all the property investors we’d have only owner-occupied units. So then where do you find a vacant house when you want to move out of your folks’ place? Everyone has to find land, buy it, and build? (I won’t even get into the fact that single family homes aren’t really a sustainable use of land)

As long as there are enough vacant units investors will lower rent enough to fill them to an equilibrium. Nobody makes money on apartment buildings that are 50% empty.

Let’s not forget that low financing rates allows companies like homebuilders to build homes and subdivisions on credit that are intended to be owner-occupied. These developments are never intended to be rentals.

I think it’s a little funky that, especially in the US, nobody really had a problem with apartment buildings being apartments until landlords started owning single family homes. Now everyone has pitchforks over it and want to ban investors from owning homes - which seems kind of insane when you think about how cities with skyscrapers work. It would make condo and apartment buildings impossible. There’s nothing different about a single family home compared to an apartment besides form factor.

The thing that all those countries have in common is low supply in the tradespeople. Those are all countries where you’re better off learning to do a desk job rather than working for a construction company. In addition, a bunch of home builders went bust in 2008 in the United States.

In the case of Canada and the US they also have some horrible bad habits when it comes to city planning. Single family home building causes the growth Ponzi scheme raising the cost of city services per capita and pushes affordable housing crazy far from the city center and strains single occupant car highway infrastructure. You’ve got to own one car per person in the US in Canada in addition to your mortgage. Then load up student loans on top of that.

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