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Priced out of home ownership

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Re: Priced out of home ownership

#701

Post by deepersprout »

Wytwwww wrote: post #383
dan-robertson wrote: post #351

Earlier quoted context omitted.

> 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…

> 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…

Just nitpicking here, but Milan (Lombardy) is the second most expensive region in Italy. The first ist South Tyrol: https://www.immobiliare.it/mercato-immobiliare/

Probably because income there is higher than in the province of Milan, and quality of life is better for some indicators.

Re: Priced out of home ownership

#702

Post by gloryjulio »

pif wrote: post #696

A utopic solution would be to learn, at last, how to have a thriving economy without increasing megalopolis. Housing prices are unaffordable in big cities, while abandoned properties are rotting in the countryside everywhere. It's time we start spreading the economy rather than concentrating the people.

Not let the city to hijack the companies to force rto is a good start. I estimate that lots of the companirs didn't really care that much about rto but the cities are forcing their hands because of their commercial buildings and real estates depends on them

Re: Priced out of home ownership

#703

Post by nightski »

pif wrote: post #696

A utopic solution would be to learn, at last, how to have a thriving economy without increasing megalopolis. Housing prices are unaffordable in big cities, while abandoned properties are rotting in the countryside everywhere. It's time we start spreading the economy rather than concentrating the people.

This comment will not go over well on HN but I am in full agreement. I am actually extremely disappointed as I thought tech would enable a more dispersed society. Instead we received the opposite.

Re: Priced out of home ownership

#704

Post by piltdownman »

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…

Ireland are a complete outlier, as the government incentivised itself not to deliver on housing as a result of IMF/Troika bullying. It set up National Asset Management Agency in 2009 to clean the property crash related debts from the balance sheets of the main Irish banks. https://en.wikipedia.org/wiki/National_Asset_Management_Agen...

As per the usual government mouthpieces, it was a roaring success -

"NAMA's overall contribution of €10.5 billion to the State, comprising its projected surplus €4.9 billion and recoupment of the €5.6 billion of state aid it paid to the participating institutions, represents a significant outperformance relative to expectations at inception in late 2009" https://www.rte.ie/news/business/2024/0306/1436280-nama-ibrc...

Sadly it has resulted in arguably the worst housing crisis in the EU. 68 per cent of people aged between 25-29 in Ireland still live at home. This figure is nearly 26 per cent higher than the EU average of 42.1.

Re: Priced out of home ownership

#705

Post by psychlops »

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…

Refreshing to see other voices out there who get it, thanks for posting. The financialization of housing and guarantee of an increasing asset price allowed global wealth to pile into purchasing as much real estate as they can.

Not only does the pump of money increase housing purchases (it's a short against the currency), but unstable currencies also cause real estate to go up as wealth looks for safety.

Re: Priced out of home ownership

#706

Post by Marsymars »

ToucanLoucan wrote: post #689
xyst wrote: post #659

Earlier quoted context omitted.

It’s a multitude of factors - limited supply in certain (most?) markets, “cheap money”, supply chain factors with certain common building materials, “corporate owned homes”. One thing that has definitely not helped is hostile building codes that prevent density. In some cities in the US, building height is constrained by the nearest single family home. Then there’s the parking minimums for buildings that allocate mor…

While it is a multitude of factors, a bunch of those factors could be solved in an instant with a simple new regulation: a cap on how many homes a single entity/person can own, with steep taxes applied to every home above that cap. This would flood the market with homes as investors and corporate landlords moved to unload inventory and the prices would fall drastically. One could even have a cap that lowers over a lo…

It seems to me that such a cap would help affordability for people who are currently renting homes that they can't afford to buy, but it's not going to make more homes available (and might slow down the rate of building due to the value of a newly built home being lower), so won't help anyone who isn't already in a home, or who already owns their home. (The latter of which it will hurt by decreasing their home value.)

Re: Priced out of home ownership

#707

Post by derlvative »

Retric wrote: post #690
dleslie wrote: post #670

Earlier quoted context omitted.

Under utilization can be measured as a factor of the vacancy rate; which influences both home pricing and rental pricing. Here in Canada, the desirable places to live all have relatively low vacancy rates for residential housing, and have for quite some time. Ie, it's rare to see cities with vacancy rates for apartments exceeding 3%, let alone a healthy 5%.[0] The CMHC estimates that by 2030 we will need 3.5M additio…

Vacancy rates should be lower where the total inventory increases and people’s ability to predict the market increases. That’s also going to be places people want to live. Consider a city of 10 million people vs 1,000 small towns of 10k people. The variability for demand in those small towns is higher and vacancy rates can’t drop below zero. So some towns hit 0 while others might be 20%. But in a city if some apartme…

This is a lot of mental gymnastics to pretend people don't need places to live. More people are born, hence more housing is needed.

Re: Priced out of home ownership

#708

Post by ToucanLoucan »

Marsymars wrote: post #706
ToucanLoucan wrote: post #689

Earlier quoted context omitted.

While it is a multitude of factors, a bunch of those factors could be solved in an instant with a simple new regulation: a cap on how many homes a single entity/person can own, with steep taxes applied to every home above that cap. This would flood the market with homes as investors and corporate landlords moved to unload inventory and the prices would fall drastically. One could even have a cap that lowers over a lo…

It seems to me that such a cap would help affordability for people who are currently renting homes that they can't afford to buy, but it's not going to make more homes available (and might slow down the rate of building due to the value of a newly built home being lower), so won't help anyone who isn't already in a home, or who already owns their home. (The latter of which it will hurt by decreasing their home value.…

Hard disagree. The market is complex but a massive driver of price hikes is investment companies and private owners coming in to an already hot market and making cash offers that are higher than any aspiring homeowner can match with loans, which are inherently tied to the stated assessment of the property. It's the largest factor in the absolutely ridiculous prices we're currently seeing, and also the most straightforward to address.

It won't fix everything, of course, but it will give us a much more normalized market to then attempt further reform on, rather than the current one which has more in common with a casino floor than a market.

Re: Priced out of home ownership

#709

Post by cagenut »

pif wrote: post #696

A utopic solution would be to learn, at last, how to have a thriving economy without increasing megalopolis. Housing prices are unaffordable in big cities, while abandoned properties are rotting in the countryside everywhere. It's time we start spreading the economy rather than concentrating the people.

completely the opposite

we artificially subsidized sprawl for generations. leading to a periphery of, as you say, rotting/abandoned countryside homes, because the economic activity generated by people living that spread out does not cover the cost of modern standard of living infrastructure over that distance.

https://www.youtube.com/watch?v=gG1T03NuZKM

cities are expensive because they do have the economic network effects of people in proximity, they are simply where the money is, combined with restrictions on building new units.

continuing to pour good money after bad down the sprawl money pit will only make things worse. the only way out is up.

Re: Priced out of home ownership

#710

Post by NoGravitas »

anon291 wrote: post #467
jachee wrote: post #309

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'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.

People don't buy vacation homes in generic suburb #5 which is where most people statistically want to buy homes. Vacation homes are in beautiful tourist areas. That can be a problem for local workers but I doubt this is much of a problem for most markets.

It's not about vacation homes. It's about rentals in generic suburb #5, primarily, but it's also the case that an increasing number of rental properties are being left vacant thanks to "algorithmic collusion" being used to drive up rents:

* https://www.businessinsider.com/real-estate-apartment-rent-p...

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

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