Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Priced out of home ownership

bbc.co.uk

Post reply on HN
Print view View original

791–800 of 1001 posts

Re: Priced out of home ownership

#791

Post by Supernaut »

piltdownman wrote: post #704
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 overal…

NAMA is not in any way responsible for the housing crisis. Its purpose was not ever to fund or incentivize homebuilding and in any case, if I think back a decade, to a point where NAMA had been in operation for five years, there was no housing crisis. Neither NAMA nor the Troika ever discouraged housebuilding. Even if it had been a policy of theirs, there wouldn't have been any need: a sizeable proportion of the building companies here went bust after the 2008 crash and their employees had to emigrate or retrain. Furthermore, none of the local banks were in the financial position (or the mood) to fund property development.

The Irish housing crisis has very simply and abruptly come about because of the massive growth in population that has occurred here over the last nine or ten years. Due to the catastrophic implosion that occurred in the indigenous building industry after 2008, speedily ramping homebuilding up to a level that can keep pace with inward migration is essentially impossible.

We may eventually be able to build fifty thousand dwellings a year, but the shortages will persist until then. There are other factors that exacerbate the problem, most notably our sclerotic planning system, but the fundamental issue is the hollowing out of the private construction sector that occurred at the start of the last decade.

Re: Priced out of home ownership

#792

Post by ch4s3 »

the_mar wrote: post #768
ch4s3 wrote: post #752

Earlier quoted context omitted.

> Only maybe like 5 out of 100s of apartments consistently had someone living in them. I would be highly surprised if this were true. I lived in NYC for year and the myth of tons of empty units is pernicious and just won't die. There has been a TON of research on this topic and it all points to there being a huge shortage of housing in the city. As a percentage of total housing stock vacant units make up a fraction o…

Anecdotally, my apartment building has 0% vacancy rate. And a newer building across the street has at least 10 apartments vacant for the most of the year. Anecdotally, i know quite a few boomers that own multiple properties (>3) in manhattan, some of which they rent some of which they keep vacant for when they want to come to the city I feel like at least some % of apartments in the city are visibly vacant most of th…

The research for this does account for pied-à-terres, which do exist in some number but are a tiny fraction of he total and mainly exist in a handful of Manhattan neighborhoods. There are only about 10K of these in NYC[1] which is 0.27% of the 3,644,000 total housing units in the city. This just doesn't seem like a real problem when the rental vacancy rate is shockingly 1.4%[2] (of the 2,183,064 total rental units).

[1] https://www.brickunderground.com/buy/what-is-a-nyc-pied-a-te...

[2] https://www.nyc.gov/site/hpd/news/007-24/new-york-city-s-vac...

Re: Priced out of home ownership

#793

Post by elevatedastalt »

baobabKoodaa wrote: post #290
deergomoo wrote: post #243

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. No-one can tell you you can’t change the wallpaper in your own home, or remodel the bathroom, or get a dog. Not everything is a purely financial decision. A home is primarily a place to live, not an investment opportunity.

> No-one can tell you you can’t change the wallpaper in your own home, or remodel the bathroom, or get a dog. Yes, the housing association absolutely can tell you not to remodel your bathroom. Unless you literally own a house rather than an appartment, you really don't have a lot more rights than a renter would have. I am speaking as a Finnish homeowner.

Most Single Family Homes don't have HoAs. Don't buy one with an HoA. They suck.

Re: Priced out of home ownership

#794

Post by Retric »

bobthepanda wrote: post #711
Retric wrote: post #690

Earlier quoted context omitted.

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…

5pc is considered the healthy level of vacancy because some apartments are always free as people move in and out. It’s similar to how totally full employment is actually a sign of a labor shortage.

Sure but on average Americans move once every ~7 years on average. A 5% vacancy rate would be ~4.2 months between owners/tenants which seems unnecessarily high. Most apartment complexes I was at could turn them over in a few weeks if someone wanted to move in. So 5% would seemingly represent a significant economic inefficiency.

3% may represent local shortages as Santa Monica is more desired than West Adams etc. So increasing availability in undesirable places may not reduce rents in general.

Re: Priced out of home ownership

#795

Post by bArray »

Earw0rm wrote: post #729
bArray wrote: post #669

Earlier quoted context omitted.

> 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 the UK, we have an issue with immigration that nobody wants to speak about. The birth rate in the UK is 1.49 in 2022 [1], meaning that housing demand should be going down. We build houses to last, and yet there is a massive shortage - why? In 2023 the ONS…

UK has massively high house prices - at least in "desirable" areas, and some not so desirable ones where it's possible to commute to work in a desirable area. That doesn't necessarily reflect a shortage, it also reflects availability of money - and therefore the market bearing higher prices. It also reflects the unevenness of the UK economy: the expensive and unaffordable housing is mostly in and around London (where…

> UK has massively high house prices - at least in "desirable" areas, and some not so desirable ones where it's possible to commute to work in a desirable area.

Other than very undesirable areas, the house prices are pretty bad. I have friends living nowhere near London in remote Scotland noticing the house price increase. I've seen a local property double in price after ~11 years.

> That doesn't necessarily reflect a shortage, it also reflects availability of money [..]

It's not clear who has an availability of money. I'm aware of zero people within recent years buying a home without a mortgage. Availability of money has never been worse.

> It took a while to filter through, sure, but in the end, it has - to the point where most families are now obligated to have two full-time earners.

I don't think we're seeing 4x the living standard of 1970. It also doesn't explain that we see house prices increase by more than 4x relative to wages [1].

> Housing is a positional good (think about an auction where demand of the most desirable items will always exceed supply), the prices bear almost no relation to rational economic utility and every relation to how much cost people are able to bear. Which is one reason they're so responsive to interest rates i.e. debt affordability.

It's didn't used to be like that. A house would feasibly cost between 4-10 years of one man's wage. But this would defend what I said, that demand outstrips supply. There is a saying at auctions: "it's only worth what somebody else is willing to pay for it."

> we're using migrants to prop it up and provide much of the labour needed by the NHS, childcare and elderly care.

It's not working, the NHS is failing. Where I live I cannot get an appointment any more. If I am lucky the doctor calls me and essentially prescribes anything I ask for. I recently saw a similar situation with midwifery.

I generally don't find myself convinced that migration is a net good. They typically have dependants and create massive burdens on our infrastructure and systems. We are now at the state where children are deferred from starting school because there just are no palce

> Our government is massively anti-immigration, and yet immigration remains high, the country can't and won't go cold-turkey on that: [..]

I suspect not. If I am right in saying that immigration increases demand for housing and therefore the price, it would make sense that the Conservative party would keep this in place as their largest donors are property developers [2].

> The current system where they can't build apartment blocks on train-station car parks because a bunch of pensioners complain that it spoils their view is massively counterproductive.

I don't think that is fair, the answer isn't to build on every square metre of the UK until it's gone. Besides, if they get rid of the train station car park, where will all the commuters park? (I've seen this one play out, they park everywhere else.)

[1] http://news.bbc.co.uk/1/shared/spl/hi/guides/456900/456991/h...

[2] https://www.theguardian.com/business/2024/mar/14/who-are-the...

Re: Priced out of home ownership

#796

Post by rndmize »

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…

No, lack of building _is_ the main problem. It doesn't matter if the demand for homes is "artificial" or not - the easiest solution is to build more.

> 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?

This is something I've wondered, and I'm of the opinion there's two reasons that are rarely discussed. One is the great recession/sub-prime crisis, which, at least in the US, caused a collapse in housing construction - I'm not sure how much this is true for other countries. The other is the coming of age of millennials, leading to a "bump" of people in their 20-30s trying to get their first home - I'd expect this to apply to most of the countries listed.

Re: Priced out of home ownership

#797

Post by seanmcdirmid »

ameister14 wrote: post #774
seanmcdirmid wrote: post #500

Earlier quoted context omitted.

And yet housing prices in much of Asia is still insane. The only market that is sane is sort of Japan with a falling population and an aversion to property speculation due to getting burned on their last property bubble. Chinese housing market is completely messed up, with turn over almost halted since the government won’t let prices fall no matter what, while they have overbuilt like crazy.

Chinese municipal governments are funded through the tax assessed on the sale of the home and not through a continuous property tax - or at least that used to be the case, haven't checked in a while. That resulted in municipalities encouraging higher prices for housing.

Some locales have experimented with property tax, but they haven't really expanded the program yet, and they usually exempt your first home. It isn't enough to fund municipal services, and cities are still screwed when it comes to income (the central government collects most of their VAT, they are expected to pay for a lot of services without a lot of income beyond taxes on property sales).

Re: Priced out of home ownership

#798

Post by elevatedastalt »

nradov wrote: post #236
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?

Home ownership isn't a good financial option for everyone, but for most consumers who aren't accredited investors it's the only way to make highly leveraged trades. You can't buy an index fund with 20:1 leverage. Of course this occasionally blows up, but even then the downside is limited. Even if ownership doesn't make sense from a financial standpoint it's still somewhat essential for parents of school age children.…

Not only that, it has better terms than a leveraged loan, since you can't get margin called! As long as you are making your mortgage payments you can't be foreclosed even if the value of the underlying property has plummeted.

Re: Priced out of home ownership

#799

Post by tcmart14 »

ericmay wrote: post #758
AnthonyMouse wrote: post #572

Earlier quoted context omitted.

> Total number of dwellings per thousand inhabitants, 2022 and 2011 The issue here is that demand shifts regionally over time. Dwelling units in Detroit don't satisfy demand in San Francisco. The result is that you continually have to increase supply in the places demand currently is. To keep prices flat, the number of units per thousand inhabitants has to increase over time, because the number of empty units in area…

> Dwelling units in Detroit don't satisfy demand in San Francisco. They do help though. Individuals need to realize they can’t afford to live in a place like California and have to give up that luxury if they want more affordable housing arrangements.

They can, but I think it is missing the other component. Housing alone in a vacuum is not going to. Its not a case of, build houses and they will come. You also need other things that attract people. Jobs, activities, amenities, restaurants, etc. But yes, if building more dwellings in Detroit along with building other things people want make Detroit more attractive to someone who would have moved to San Francisco instead, it can alleviate housing demand in San Fransisco. Which is what some of these places should be gunning for.

Re: Priced out of home ownership

#800

Post by bobthepanda »

Retric wrote: post #794
bobthepanda wrote: post #711

Earlier quoted context omitted.

5pc is considered the healthy level of vacancy because some apartments are always free as people move in and out. It’s similar to how totally full employment is actually a sign of a labor shortage.

Sure but on average Americans move once every ~7 years on average. A 5% vacancy rate would be ~4.2 months between owners/tenants which seems unnecessarily high. Most apartment complexes I was at could turn them over in a few weeks if someone wanted to move in. So 5% would seemingly represent a significant economic inefficiency. 3% may represent local shortages as Santa Monica is more desired than West Adams etc. So i…

The 5% is a sliding window. Some of those have just opened up, some of those are about to close at any given time. And it also represents all buildings, from super in demand complexes to slower moving listings, and is a rule of thumb that also aggregates seasonal differences.

In aggregate, 5-7% seems to be a sweet spot where landlords can find tenants in a reasonable amount of time and tenants are not scrambling to send out a dozen applications a week.

Post reply on HN