6 ms·

> Speculative real estate investment is a direct result of restrictive zoning. By definition, it's not. It's a term coined to separate out the impact on prices

> Speculative real estate investment is a direct result of restrictive zoning. By definition, it's not. It's a term coined to separate out the impact on prices of people buying-to-live vs people buying-to-sell/rent-and-profit. And if foreigners are more likely to buy for speculative purposes, barring them from doing so will decrease speculative increases in house prices.

jaredklewis 9y ago
Right, but things with fixed supply make perfect investment vehicles, and when people investment in real estate that is speculation. Imagine if the stocks of public companies were not fixed in supply. The company at any time could simply decide to have shares for 200%, 300%, or 1000% without compensating existing shareholders in any way. If that was the case, stocks would be total garbage as an investment. Prices would plummet to 0. The reason metro real estate is so attractive as an investment is because supply is inelastic. If we want to encourage usage, as oppose to hoarding, we should do like we do with fiat currencies and allow more of it to be made. Banning foreigners might have some tiny effect, but honestly seems a bit like arranging deck chairs on the Titanic. We can check in after a year, but all my money is on Auckland continuing to have an expensive housing market (unless they allow more rezoning). Further, banning foreigners of course is also banning a valuable export and will cut off a stream of foreign money that was previously flowing into the local economy.
- tmnvix 9y ago
  > when people investment in real estate that is speculation. Investing in real estate would be purchasing property for its income earning potential. Speculating would be purchasing for capital gains potential. You might argue that people do both at once but if you would only make the purchase if there is a potential for capital gains and not otherwise, then you are speculating.
  - gnaritas 9y ago
    Investment and speculation are not different things, all investment is speculation.
    - tmnvix 9y ago
      From the definition of financial speculation cited elsewhere in Merriam-Webster: > Speculation is a method of short-term investing whereby traders essentially bet on the direction an asset's price will move. This is what most people would assume speculation to mean in the context of this discussion. It is quite normal to compare this type of speculative investment with other - especially productive - investment.
      - gnaritas 9y ago
        I'm very well aware of what he means, that's obvious from my response, one can be clear without misusing words and it's entirely appropriate to correct someone who's using those words wrong as if they're unrelated when they're actually both a type of investing. Try understating what's going on before you start quoting a dictionary.
conanbatt 9y ago
> rent-and-profit Rent and profit is a great investment for the general public. Thats not speculation, thats straight down investment. Buy to sell is speculation, in the sense that it might not be representing the underlying risks. But even then its doubtful: if you think construction materials will rise 20% in the next year, buying your house to day and sitting on it is a sound investment, one that benefits the whole. Speculator is an overused word to depict an enemy that kills itself.
- gnaritas 9y ago
  > Thats not speculation, thats straight down investment. You make no sense, all investment is speculation.
  - conanbatt 9y ago
    By what definition of investment?
    - gnaritas 9y ago
      The words are literally synonyms, see any dictionary.
      - logfromblammo 9y ago
        I always think of investment as chasing the dividends and speculation as chasing the capital gains. Investors prioritize Sharpe's and alpha, while speculators are more interested in beta. Investors want to grow a business, while speculators want to make money from their money. While they may have the same meaning in a general sense, and are synonyms from a distance, once you get up close, you can distinguish meaning between them. That's just how English works. Huge and colossal are the same until you pull out the D&D sourcebook, and then it turns out that colossal is bigger than huge.
        gnaritas 9y ago

jaredklewis 9y ago

Right, but things with fixed supply make perfect investment vehicles, and when people investment in real estate that is speculation. Imagine if the stocks of public companies were not fixed in supply. The company at any time could simply decide to have shares for 200%, 300%, or 1000% without compensating existing shareholders in any way. If that was the case, stocks would be total garbage as an investment. Prices would plummet to 0. The reason metro real estate is so attractive as an investment is because supply is inelastic. If we want to encourage usage, as oppose to hoarding, we should do like we do with fiat currencies and allow more of it to be made. Banning foreigners might have some tiny effect, but honestly seems a bit like arranging deck chairs on the Titanic. We can check in after a year, but all my money is on Auckland continuing to have an expensive housing market (unless they allow more rezoning). Further, banning foreigners of course is also banning a valuable export and will cut off a stream of foreign money that was previously flowing into the local economy.

tmnvix 9y ago
> when people investment in real estate that is speculation. Investing in real estate would be purchasing property for its income earning potential. Speculating would be purchasing for capital gains potential. You might argue that people do both at once but if you would only make the purchase if there is a potential for capital gains and not otherwise, then you are speculating.
- gnaritas 9y ago
  Investment and speculation are not different things, all investment is speculation.
  - tmnvix 9y ago
    From the definition of financial speculation cited elsewhere in Merriam-Webster: > Speculation is a method of short-term investing whereby traders essentially bet on the direction an asset's price will move. This is what most people would assume speculation to mean in the context of this discussion. It is quite normal to compare this type of speculative investment with other - especially productive - investment.
    - gnaritas 9y ago
      I'm very well aware of what he means, that's obvious from my response, one can be clear without misusing words and it's entirely appropriate to correct someone who's using those words wrong as if they're unrelated when they're actually both a type of investing. Try understating what's going on before you start quoting a dictionary.

conanbatt 9y ago

> rent-and-profit Rent and profit is a great investment for the general public. Thats not speculation, thats straight down investment. Buy to sell is speculation, in the sense that it might not be representing the underlying risks. But even then its doubtful: if you think construction materials will rise 20% in the next year, buying your house to day and sitting on it is a sound investment, one that benefits the whole. Speculator is an overused word to depict an enemy that kills itself.

gnaritas 9y ago
> Thats not speculation, thats straight down investment. You make no sense, all investment is speculation.
- conanbatt 9y ago
  By what definition of investment?
  - gnaritas 9y ago
    The words are literally synonyms, see any dictionary.
    - logfromblammo 9y ago
      I always think of investment as chasing the dividends and speculation as chasing the capital gains. Investors prioritize Sharpe's and alpha, while speculators are more interested in beta. Investors want to grow a business, while speculators want to make money from their money. While they may have the same meaning in a general sense, and are synonyms from a distance, once you get up close, you can distinguish meaning between them. That's just how English works. Huge and colossal are the same until you pull out the D&D sourcebook, and then it turns out that colossal is bigger than huge.
      - gnaritas 9y ago