5 ms·

Are houses the new tulips? If value isn't linked to utility and only to speculative investor demand, it's hard to conclude otherwise...

21 9y ago
Only if said tulip is in a desired place. "Location, location, location" as someone would say. So the investment is actually in the location, not in the house itself. Which is a good idea. For a bunch of reasons cities will continue to grow, and bigger cities will grow faster. So if you have a multi-decade view, buying location in any major cities is a sound idea.
- paganel 9y ago
  > For a bunch of reasons cities will continue to grow, and bigger cities will grow faster. In the Eastern-European country from where I'm from the cities' population has actually decreased after 1990, the demographic crisis is a real thing (the country's population as a whole has decreased by 17-20% after 1990). I see this phenomenon extending to the rest of Europe in the next 20-30 years.
  - 21 9y ago
    What about the population of Bucharest? Did the population decreased because of lot of your people migrated to Western Europe, and in particular to Western capitals? This chart shows clear increases in most major cities of Europe: https://media.boingboing.net/wp-content/uploads/2015/06/europepopulation.jpg https://media.boingboing.net/wp-content/uploads/2015/06/euro...
    - paganel 9y ago
      > Did the population decreased because of lot of your people migrated to Western Europe, and in particular to Western capitals? Interesting question! Intuitively, I'd say that the answer is "yes". The birth vs mortality rate is also a huge factor, of course, as in Bucharest people tend to die more compared to kids being born here. Until we joined the EU that was counter-balanced by the countryside people coming to Bucharest (so much so that in the early 1980s the communist regime instituted some draconian rules against that, pretty similar to the Hukou system now in effect in China), but after our EU accession those countryside people saw that the salaries in Spain or Italy were higher compared to those from Bucharest, plus cost-of-living was pretty much the same if not lower, so they took the logical decision and migrated to those countries instead. Right now Bucharest is feeding off smaller cities from Southern and Eastern Romania. I've made a heatmap showing that phenomenon in here: http://4.bp.blogspot.com/-tbQVpiC4CuI/UX7rUriCEBI/AAAAAAAAAko/3mOPiZMcnVc/s1600/Picture+5.png http://4.bp.blogspot.com/-tbQVpiC4CuI/UX7rUriCEBI/AAAAAAAAAk... ("hotter" points represent places where people lived before coming to Bucharest), based on FB-profile data I parsed a couple of years ago; of course, there's nothing scientific-like in that map, I just found it interesting. This strategy is not sustainable on the long-term.
valuearb 9y ago
Maybe in the UK. But the solution is the opposite of what the author intends. Bubbles are created by government policies distorting the market, in the US it was subsidizing mortgages regardless of risk. Pouring more government aid into these markets will just increase the bubble.

21 9y ago

Only if said tulip is in a desired place. "Location, location, location" as someone would say. So the investment is actually in the location, not in the house itself. Which is a good idea. For a bunch of reasons cities will continue to grow, and bigger cities will grow faster. So if you have a multi-decade view, buying location in any major cities is a sound idea.

paganel 9y ago
> For a bunch of reasons cities will continue to grow, and bigger cities will grow faster. In the Eastern-European country from where I'm from the cities' population has actually decreased after 1990, the demographic crisis is a real thing (the country's population as a whole has decreased by 17-20% after 1990). I see this phenomenon extending to the rest of Europe in the next 20-30 years.
- 21 9y ago
  What about the population of Bucharest? Did the population decreased because of lot of your people migrated to Western Europe, and in particular to Western capitals? This chart shows clear increases in most major cities of Europe: https://media.boingboing.net/wp-content/uploads/2015/06/europepopulation.jpg https://media.boingboing.net/wp-content/uploads/2015/06/euro...
  - paganel 9y ago
    > Did the population decreased because of lot of your people migrated to Western Europe, and in particular to Western capitals? Interesting question! Intuitively, I'd say that the answer is "yes". The birth vs mortality rate is also a huge factor, of course, as in Bucharest people tend to die more compared to kids being born here. Until we joined the EU that was counter-balanced by the countryside people coming to Bucharest (so much so that in the early 1980s the communist regime instituted some draconian rules against that, pretty similar to the Hukou system now in effect in China), but after our EU accession those countryside people saw that the salaries in Spain or Italy were higher compared to those from Bucharest, plus cost-of-living was pretty much the same if not lower, so they took the logical decision and migrated to those countries instead. Right now Bucharest is feeding off smaller cities from Southern and Eastern Romania. I've made a heatmap showing that phenomenon in here: http://4.bp.blogspot.com/-tbQVpiC4CuI/UX7rUriCEBI/AAAAAAAAAko/3mOPiZMcnVc/s1600/Picture+5.png http://4.bp.blogspot.com/-tbQVpiC4CuI/UX7rUriCEBI/AAAAAAAAAk... ("hotter" points represent places where people lived before coming to Bucharest), based on FB-profile data I parsed a couple of years ago; of course, there's nothing scientific-like in that map, I just found it interesting. This strategy is not sustainable on the long-term.

valuearb 9y ago

Maybe in the UK. But the solution is the opposite of what the author intends. Bubbles are created by government policies distorting the market, in the US it was subsidizing mortgages regardless of risk. Pouring more government aid into these markets will just increase the bubble.