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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#641

Post by fransje26 »

Chris2048 wrote: post #544
speeder wrote: post #455

Earlier quoted context omitted.

Lisbon is where the issue is the worst of all. When I had a job, I had to choose the office where I would work. I deliberately avoided the Lisbon office because I knew there was no realistic chance I would find a place to live there with my family with Portuguese wages.

sorry, I meant "more than half of the buildings even in expensive areas are boarded-up"

Not OP, and not living in Lisbon, but yes, it did strike me as odd to see so many buildings boarded-up when I was visiting there 2 years ago. Even in what looked like "prime" locations.

Re: Priced out of home ownership

#642

Post by sach1 »

downrightmike wrote: post #537
NegativeLatency wrote: post #359

Earlier quoted context omitted.

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.

Every state west of the Mississippi has at least 50% of all land owned by the Fed Gov and isn't used at all. We have plenty of land, that isn't a real problem.

I don't know that that is what they were claiming. Land use policy != Land availability. If it was, Russia would have ended homelessness 500 years ago.

Re: Priced out of home ownership

#643

Post by JimDabell »

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…

> 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.

Increasing building and increasing density are different things. Singapore and Hong Kong are dense because they have a very limited geographic area to build in. You can’t point to their density and conclude that adding housing doesn’t help lower housing costs. They would be even more expensive if they weren’t so dense.

Re: Priced out of home ownership

#644

Post by matwood »

abenga wrote: post #622
matwood wrote: post #476

Earlier quoted context omitted.

> Higher rates don't do anything because incumbent owners simply pull houses off the market to wait it out. You need a recession.

Do lower house prices in a recession matter if no one has money, and everyone is being laid off from work? I feel like no one, except the very rich, benefits.

Unfortunately recessions and job losses are how you get lower prices. You need forced selling. As long as we're labor constrained with a hot GDP, people with a house and low rate will continue living their best life.

Re: Priced out of home ownership

#645

Post by triceratops »

aaomidi wrote: post #159
caeril wrote: post #51

Earlier quoted context omitted.

Indeed. My home "value" has roughly doubled in the last five years. Sounds nice, but land/home values in the area I'd like to move to has nearly tripled in the same timespan. I feel bad for renters priced out of the market, but many of us who have "enjoyed" the upside are actually deeply underwater relative to our preferences, to say nothing of the doubling of insurance premiums, and ~25% property tax hikes in the la…

Property tax shouldn’t be going up with this tbh. If everyone’s housing and land is becoming more expensive, then you need to tax smaller %s to get the same budget. To me this sounds like your city/state is just ballooning their budgets.

The city or state can also put the extra $ in their rainy day fund.

Re: Priced out of home ownership

#646

Post by RugnirViking »

In my opinion the problem is the ability of people to write some percentage of owned homes as tax losses as depracation to a ridiculous degree. Its often possible to buy a home, write off its entire value as a loss due to depracation, and then sell it for more then you bought it for, without ever once renting or using it. This is also true for some other asset classes, like ships

Re: Priced out of home ownership

#647

Post by patall »

dalyons wrote: post #599
patall wrote: post #321

Earlier quoted context omitted.

Makes sense, thank you! Actually that would go in line with my suspicion that 'the market' predicts/trends towards a 2 USD = 1 EUR rate within one or two decades.

How are fixed mortgages related to exchange rate forecasts?

Maybe I am wrong, but at least in some contexts one can get a mortgage in a foreign currency. In which case it would be beneficial to use the more inflating one if they were the same rate, wouldn't it?

Re: Priced out of home ownership

#648

Post by Macha »

seanmcdirmid wrote: post #507
digbybk wrote: post #472

Earlier quoted context omitted.

> This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence. I hear this argument a lot and always wonder if the causal direction is flipped: people use housing as an investment because it’s scarce, not that it’s scarce because it’s used as an investment. If there weren’t so many restrictions on building, the supply would grow to meet the demand…

Ya, and housing used as an investment doesn’t need schools or any real infrastructure, so we could basically build them anywhere. Planning is only needed if people are going to live in them.

Ireland leading up to 2008 basically ended up trying that, with ghost estates that then got knocked. China has also basically done this.

It obviously doesn't work as housing, but even its value as an investment is at least nominally tied to the fact that someone, somewhere could value it as a house. Otherwise, eventually it's found the emperor has no clothes and it comes tumbling down.

Re: Priced out of home ownership

#649

Post by starbird3000 »

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…

Where I am there’s been a huge increase in houses being bought for cash by equity hedge funds, like 25% of houses going on the market. Nearby Kushner bought hundreds of houses in Baltimore. The impact of this is that house prices soared because no one can compete against a multi-billion-dollar company to buy a house, which artificially pushes up prices.

Secondly, I’ve done a lot of engagement with policy makers and builders and you are not going to get affordable housing being built if you relax zoning laws (which I’m in favor of across the whole city). Instead, what is supposed to happen is that the older properties become less attractive and hence their prices (or rent) are supposed to fall. That’s the theory anyhow. Anyway, the builders all say there is no financial incentive for them to build affordable housing, they make so much more on luxury buildings. You’ll only get it if the local government does it themselves and most in America are reluctant to get involved (it’s why they like saying 15% of a complex should be ‘affordable’ because they don’t have to do anything about it, the builders do, and it’s too small an impact to fix the issue).

Re: Priced out of home ownership

#650

Post by mlrtime »

jltsiren wrote: post #581
Wytwwww wrote: post #383

Earlier quoted context omitted.

> for some graphs that show Europe vs anglophone countries in an obvious way Housing is still extremely expensive in most major European cities relative to income. e.g. Milan, Lisbon, London, Rome, Munich are significantly more expensive than San Francisco or San Jose (e.g. Milan is more than 2x more expansive) if you're earning the median income. It's not like most people in some European countries chose to live in…

Housing affordability is qualitatively different between Europe and the US. When a European city is expensive, it's usually only the central part that's expensive. Prices drop steeply as you get to the suburbs and satellite towns. In the US, suburbs and satellite towns are more likely to remain expensive, as long as you are within a semi-reasonable commuting distance. I guess that's because the US city is more likely…

I think you are close but slightly off. EU has historically better public transit and lower sprawl allowing more price points of housing while still a "reasonable" commute.

US cities are vastly larger by land size, because America is larger allowing it, added with fewer public transit options.

Look at Houston, massive sprawl and some of the cheapest housing in the country.

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