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Priced out of home ownership

bbc.co.uk

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Re: Priced out of home ownership

#861

Post by mo1ok »

015a wrote: post #679
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…

IMO takes like this are problematic. The problem is not enough building. That's it. All the other stuff you said is just noise that confuses people into believing this is some hyper-complicated modern-financial-system problem that's going to end the world due to its intractability. Its not any of that. Its just not enough building. There are problems which feed into there not being enough building; the biggest one is…

It IS more complicated than that. It's not easy to build within a 1 hour commute of a dense population center. All that land is owned, built, and called for. Calling it "overpopulation" could be fair.

A parallel problem is immigration and, as the top comment pointed out, cheap credit encouraging vacancy.

Re: Priced out of home ownership

#862

Post by tossandthrow »

cm2187 wrote: post #346
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?

Depends when. A home is a leveraged investment, plus often exempt from capital gain taxes. If you bought it at the beginning of a large real estate bull market you probably did better than an unleveraged investment in the S&P.

Then you pay property tax instead.

I My calculations (for Denmark) the property taxes are roughly equivalent to kapital gains tax.

Re: Priced out of home ownership

#863

Post by B56c »

csomar wrote: post #746
anthonypasq wrote: post #713

Earlier quoted context omitted.

cities are fundamentally more efficient and just a natural byproduct of the way capitalism allocates money and people.

And you are basing this on what evidence. Cities spread disease either infectious or by pollution. If a job can be done remotely, the company should not only allow it but it should be the only way to do it. Many jobs can be done remotely today and this will move annex jobs with them. Cities will remain central hubs but this will reduce the pressure and demand.

See cagenut's comment above. Cities are economically robust because they have the economic activity to justify the infrastructure investments. You can have much more rural, spread out areas, but they can't afford to support many of the amenities that modern people would consider necessities, especially tech workers.

Re: Priced out of home ownership

#864

Post by ffsm8 »

ethbr1 wrote: post #833
xenadu02 wrote: post #822

Earlier quoted context omitted.

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.

These aren't all issues though. Another contributing factor is that home/lands ownership can be inherited.

That's going to be the biggest contributer as time goes on (not right now though), as eventually all desired land will have been bought by what amounts to an oligarchy.

Honestly, land/homes should never be inheritable, and companies should never be able to own land altogether. Not that this would ever happen. The status quo is too profitable for the land/home owners.

Re: Priced out of home ownership

#865

Post by iancmceachern »

The problem is that we've made our housing into a financial product, not housing. We optimize for things like appreciation, maximizing square footage, etc. Not optimizing for the people who live in them, our communities.

Same with startups, anymore many of them are setup as attractive financial products, not attractive businesses.

Re: Priced out of home ownership

#866

Post by jimbokun »

ambicapter wrote: post #805
jimbokun wrote: post #780

Earlier quoted context omitted.

> "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.

Um, yes. That's what I was getting at.

Re: Priced out of home ownership

#867

Post by culopatin »

whoknowsidont wrote: post #196
DGAP wrote: post #180

Stop subsidizing demand at the national level. Stop restricting supply at the local level.

That's not the problem at all. Stop allowing people to buy multiple homes. Stop allowing landlords to "collaborate" on prices.

Im ok with people owning multiple homes. I might not want to buy something in a place where I’ll live for 1 year. Or many other reasons to not want to own. HOWEVER, make it an inconvenience to have the place sit empty. No tax because they’ll just raise rent to cover the offset, but make it a law or just very bureaucratic and people will either choose to rent it out or sell it to someone that will use it.

Re: Priced out of home ownership

#868

Post by supertimor »

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.

This is not actually true.

There are only 5 states with federally owned land over 50% (Nevada, Utah, Idaho, Alaska and Oregon). Other states west of the Mississippi don’t necessarily have a large percentage of federal land. For instance, Texas only has 1.78% that is federally owned, Arkansas at 9.38%, Oklahoma at 1.59%, Kansas at 0.52%, and the Dakotas at 3.91% and 5.41%. In fact, there are only ten states with over 30% of federally owned land in the Union, granted they are all in the Western part of the States.

2024 https://worldpopulationreview.com/state-rankings/federal-lan...

These have a cleaner interface but are from 2018

https://wisevoter.com/state-rankings/federal-land-by-state/

https://ballotpedia.org/Federal_land_ownership_by_state

Re: Priced out of home ownership

#869

Post by adra »

tossandthrow wrote: post #764
adra wrote: post #751

Earlier quoted context omitted.

Interest rates in Canada have doubled and were only seeing a trickle of investors selling. I do agree that we have way too much investment in finished real estate, which is only hurting consumers trying to get into a market. We've been a lot more strict with ownership transparency and clamping down on short term rentals, which is still too soon to see how significant the effects will be, but the big tldr here being t…

In December there was an expectation that the FED would do 7 interest rate reductions this year. Now we are down to 1 - maybe. I think a lot of people in the market are still holding on with a strong expectation that the interest rates will go down. Personally, I think high interest rate environments are better for most people - it compresses asset prices and adds more value to a salary. But it will take some years f…

There's a huge difference in rates and how it affects markets between Canada and the US. I'd assume most US based loans have a lock in period of 25-30 years, but is basically unheard of to have Canadian rates locked in longer than 5 years for fixed mortgages. That means there's a bunch of mortgage renewals that will dramatically affect the amount of disposal income for these individuals that locked in low rates a few years ago. In the US, it's more about potential buyers holding out for cheaper rates. In Canada is more about owners that "suddenly" have dramatically higher servicing rates. It's not unlikely that people are paying 1000/mo extra post renewal.

Re: Priced out of home ownership

#870

Post by SCM-Enthusiast »

setgree wrote: post #838
xenadu02 wrote: post #822

Earlier quoted context omitted.

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 dur…

but the land it's built on is an appreciating asset.
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