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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#831

Post by pompino »

MisterBastahrd wrote: post #209
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?

Every person should be able to have a right to say "This is me. This is where I live. I belong here." It's all fun and games until you've lived in one place for 15 years and your landlord decides to sell the place out from under your feet because a developer wants to build a high rise.

Convince enough people that this should be a right, and its automatically a right. Rights are just made-up constructs that only exist in our head.

Re: Priced out of home ownership

#832

Post by VirusNewbie »

neilwilson wrote: post #336
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…

The issue is always lack of building. Higher interest rates just mask the problem and hand more money to rich people for no effort. The problem is that the private housing production system responds to increased credit availability only at the margins and does not over produce. That’s largely because houses are still hand built and not really substitutable like a vehicle. You don’t generally have a choice of two hous…

>The issue is always lack of building.

This is why NY is cheaper than the midwest.

Re: Priced out of home ownership

#833

Post by ethbr1 »

xenadu02 wrote: post #822
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…

People really want there to be "one reason" for skyrocketing housing prices. Real life is not so accommodating. The problem is multi-faceted. Is there asset price inflation due to cheap money? Yes. Have foreign nationals been parking their cash in real estate in certain western countries? Yes. Has restrictive zoning and NIMBY-ism reduced the incoming supply of new homes? Yes. Multiple things can be true at the same t…

Exactly! And important to recognize the interest groups behind preventing progress on each.

Fixing the issue has been stymied for too long by each pointing at the others and saying "They're the real problem!" to justify inaction / rolling back fixes on their pet interest.

All need to be addressed.

Re: Priced out of home ownership

#834

Post by lkrubner »

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…

"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? ... a broken financial system."

You claim that these countries do not have the same system of building but they do have the same financial system. That is a large claim to make. You should try to offer at least some kind of argument for why you feel the variations in the financial systems are less significant than the variations in their systems of construction.

Re: Priced out of home ownership

#835

Post by QuarterReptile »

derlvative wrote: post #707
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…

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.

How much more housing? More housing is being built.

Average house size has increased significantly over time. Average household size trends broadly downward, with rare counterexamples.

When is "better" also "more"? Because better costs more, just like more area costs more. What resources should be redirected from quality to quantity?

Re: Priced out of home ownership

#836

Post by ethbr1 »

bane wrote: post #826
rndmize wrote: post #796

Earlier quoted context omitted.

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…

> No, lack of building _is_ the main problem. This might be one of those things where the obvious bit (built more!) is both true, and reductively incomplete. We do have a sense that just building more housing in the presence of lots of liquid capital and easy credit seems to create a speculator market -- even down to retail investors. (e.g. The China real estate bubble bursting seems to be strong evidence that this c…

I'd love to see a progressive rate purchase tax on properties. Proceeds to fund transit capital expansion.

Above the median, buyers (and therefore developers building) start incurring increasing transaction costs.

Part of the issue is that builders can dump luxury properties into the market, then wash their hands of future responsibility as soon as it's sold.

Re: Priced out of home ownership

#837

Post by pompino »

Carrok wrote: post #260
ayakang31415 wrote: post #238

I am sure people are priced out of "desirable" places. I don't think this can be fixed by oversupplying homes in specific areas. You need to incentivize people to move into low dense areas.

The reason no one else lives there are the same reasons I don’t want to live there. Not everyone will be happy living in the middle of nowhere. I’d wager most wouldn’t.

Sure, but that is what public policy is about. Incentivizing citizens through a democratic process that alleviates resource constraints so we can plan for the future.

Re: Priced out of home ownership

#838

Post by setgree »

xenadu02 wrote: post #822
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…

People really want there to be "one reason" for skyrocketing housing prices. Real life is not so accommodating. The problem is multi-faceted. Is there asset price inflation due to cheap money? Yes. Have foreign nationals been parking their cash in real estate in certain western countries? Yes. Has restrictive zoning and NIMBY-ism reduced the incoming supply of new homes? Yes. Multiple things can be true at the same t…

Multi-faceted and interrelated: a lot of housing would become a less attractive investment vehicle if near-substitutes were more plentiful. An overseas investor buying a Vancouver condo assumes that the asset will have high resale value (in addition to its use value as, e.g., a rental or airbnb). But in a saner world, housing would depreciate in value over time in proportion to its use and maintenance, like other durable goods.

Re: Priced out of home ownership

#839

Post by wolpoli »

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…

> Too many properties are being used as investments and not as a primary residence.

When properties are being used as an investment, they are rented out. If that's true, it should show up as higher rental vacancy rate and low/stagnant rent. That's not the case in Vancouver, BC as we have low vacancy rate and rising rent.

Homes could be left as left empty as well, but we have multiple annual taxes, ranging from 0.5% to 3% of the total property value targeting these underutilized home, and that hasn't driven price down. In additions, these taxes essentially provide an one-time only increase in the number of homes available. They can be easily absorbed by population growth.

With the population increase in Canada, building more is the only way out.

Re: Priced out of home ownership

#840

Post by BeFlatXIII »

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…

> Housing is just where the rubber hits the road and regular lives are directly affected.

The reason why we didn't see rampant consumer product inflation in the wave of irresponsible money-printing meant to soften the 2008 crisis was that the stimulus targeted at the wealthy and went into assets, such as the housing you just mentioned. However, COVID-19 stimulus checks were given to normal people, so inflation now hits normal people's daily purchases.

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