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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 p
by 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 agoInvestment and speculation are not different things, all investment is speculation.
- tmnvix 9y agoFrom 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 agoI'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.