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Priced out of home ownership

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Re: Priced out of home ownership

#801

Post by piltdownman »

Supernaut wrote: post #791
piltdownman wrote: post #704

Earlier quoted context omitted.

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 buil…

I never claimed its aim was to fund or incentivize housebuilding - in fact not only was NAMA emblematic of the overall government policy to restrict supply in order to re-bolster its portfolio of residential housing in deep negative-equity, it also played a significant role in worsening the housing crisis through its sale of assets to real estate investment trusts (REITs). https://www.irishtimes.com/opinion/housing-crisis-why-nama-s...

You can think back a decade as you say, but your recollection isn't in accordance with the recorded protests at the time https://www.independent.ie/news/protesters-call-for-nama-fun...

Dr Rory Hearne's research from Maynooth sums it up brilliantly

"The housing crisis has also been caused by wider government policy from 2010 to encourage the entry of global investors and vulture funds (via various tax incentives, lobbying and fire sale of assets) into Ireland in order to offload toxic loans from NAMA and the banks. Rising house prices and rents post 2013 were also viewed positively and were promoted as an enticement to investors, while rising prices and rents were also viewed positively for rehabilitating the balance sheets of the banks, a core aim of all policy post 2008. The impact on the housing system was not considered an issue, despite myself and others highlighting the potential problems.

We can see now that these policies have contributed directly to the crisis with vulture funds hoarding land purchased from NAMA. Vulture funds are more likely to repossess houses in mortgage arrears and raise rents on buy to let properties (for example, Ireland's biggest landlord Ires Reit has raised rents substantially). The increase in investors purchasing homes means they are competing with potential home owners. We need to cool off this speculative inflow of investors into our housing system (investors bought up to a fifth of all homes in 2017) and extend the vacant sites tax to derelict property and increase it further to force either sale or development." https://www.maynoothuniversity.ie/research/spotlight-researc...

Re: Priced out of home ownership

#802

Post by piltdownman »

returningfory2 wrote: post #786
piltdownman wrote: post #704

Earlier quoted context omitted.

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…

What is the connection between the Irish housing crisis and NAMA?

The tl;dr version is encapsulated here; can't post an archive link as on the work VPN

https://thecurrency.news/articles/86599/we-had-our-chance-to...

Re: Priced out of home ownership

#803

Post by countvonbalzac »

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…

Tokyo does have much lower housing costs than New York because they build enough housing :)

Rent prices are 72.9% lower in Tokyo compared to New York [1].

[1] https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

Re: Priced out of home ownership

#804

Post by richrichie »

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…

> In my view this is symptomatic of a more fundamental issue - global asset price inflation driven by a broken financial system (i.e. a system being artificially pumped up with cheap credit). Housing is just where the rubber hits the road and regular lives are directly effected. Just look at the tight correlation between the increase in the money supply and property prices.

Prior to covid, the global economy was booming. US and UK had low unemployment rates. the US especially was remarkably doing well, with lowest unemployment rate for minority communities.

There is a price to pay for completely disregarding long-term economic costs of reckless responses to a what was a moderately severe flu epidemic. We went nuts and shut ourselves down. And on top of that, we helicopter dropped 4-6 trillion dollars of freshly printed cash.

And the reckless governance continues in the name of flaming conflicts in Europe and ME. A lot of what happened in the recent years is attributable to just atrocious governance.

Re: Priced out of home ownership

#805

Post by ambicapter »

jimbokun wrote: post #780
shuckles wrote: post #318

Earlier quoted context omitted.

> People intuitively jump to the conclusion that the problem is caused by a lack of building. In my experience, people "intuitively" jump to basically every conclusion besides this one. "Greedy landlords" or "[favorite scapegoat] collusion" are intuitive conclusions which are far more common than supply and demand. > Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same ina…

> "Greedy landlords" It's always amusing that this implies back when housing was cheap, landlords weren't greedy.

Not really? It could also imply that they were greedy then, but less capable of acting on their greed.

Re: Priced out of home ownership

#806

Post by mariodiana »

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…

I agree. Inflating the money supply (for example, via cheap credit policies) distorts the economy and creates malinvestment. Unadulterated consumer demand is eclipsed by the artificial demand created by the newly created money. The new money isn't distributed uniformly and immediately in an economy. It starts out somewhere. So, in this case, one of the distortions is in the housing market.

Working people are perfectly willing to purchase homes they can afford. In fact, it is safe to assume that it is one of their top priorities. If affordable housing isn't being created, something is amiss. See above!

Re: Priced out of home ownership

#807

Post by FooBarBizBazz »

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…

> 2. The capital gains tax exemption of $500,000 has not risen with inflation.

I wish there were a $500k capital gains exemption for turning my ETFs into a house.

Yet another way in which real estate receives massive privilege.

Re: Priced out of home ownership

#808

Post by mattgibson »

rndmize wrote: post #796
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 i…

You really need to provide data to make that assertion. Shortages of buildings are not the only reason that property prices can be high.

Properties are made up of a building and a plot of land that it's attached to. Whilst we can nake more buildings, we can't make more land, so the land in a given location is by definition going to be in a permanent state of shortage. If more poeple want to live in that location OR (the main driver of this crisis) if more money is chasing the same fixed supply, then the prices rise. The land component is the part that has become more expensive recently, not the buildings.

Re: Priced out of home ownership

#809

Post by nostrademons »

materielle wrote: post #726
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…

Why is the vacancy rate so low in desirable neighborhoods? Is it that there isn’t enough housing period, in the entire country. Or is it is people and investments abandoning rural areas in favor of a handful of city neighborhoods? I’m also curious if those vacancy rates can be / have incentive to be gamed by the homeowners, or otherwise don’t paint a very accurate picture. I lived in a wealthy part of NYC for a while…

Just a note that "occupied" != "can see people milling about". A lot of people (particularly in NYC) treat their apartment as just a place to sleep. During the day, they're at work. For breakfast and dinner, they eat out. In the evenings, they hit the clubs, or go over to a friend's, or visit one of any number of cultural attractions. That's why they live in NYC, because of the density of non-home forms of entertainment. Particularly if you value your privacy, it makes sense to keep the blinds permanently shuttered, leave your apartment in the morning and come back at night, and just sleep & shower there.

Re: Priced out of home ownership

#810

Post by onlyrealcuzzo »

JonChesterfield wrote: post #15

The UK made renting property a lot less lucrative a few years ago. Something about the tax position of letting mortgaged property. That meant landlords sold their houses - which I believe was broadly the point - and thus there are fewer places to rent and the cost of renting has increased to the new point of stability. I think this probably has decreased house prices to some extent, but people are really insanely rel…

> I think this probably has decreased house prices to some extent, but people are really insanely reluctant to sell a house for less than they bought it for

If a mortgage is recourse, and your home price has fallen enough - yeah, you have a pretty big reason not to sell.

Especially if your alternative is to pay more monthly for a worse rental (often the case).

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