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This is partly true, partly wrong. Each house bought for laundering money will be taken of the market for foreseeable future reducing supply. Also house price
by tehlike 6y ago
This is partly true, partly wrong.
Each house bought for laundering money will be taken of the market for foreseeable future reducing supply.
Also house prices are very sticky, those (non-laundering people) who bought at the inflated price will likely not want to sell for lower, creating a situation where they might be stuck with their house in case of a temporary market crash, leading to further supply constrained.
The low interest rate environment and the levarage works both ways :)
- crazygringo 6y agoBut what you're describing is normal supply and demand in any housing market, laundering or not. If a family moves in from out of town, they take the house off the market for the foreseeable future as well. My point is that laundering demand is no different from regular demand, economically -- demand is demand, period. Laundering doesn't push prices up more than they'd get pushed up if it were actual families coming to down. It merely pushes them up the exact same amount.
- tehlike 6y agoyeah but laundering demand is less price sensitive. If i am laundering money, i am OK paying some "tax". That's how laundering works in general. Even in case of car wash, they show it as a legitimate income, and they do pay tax on it - they just happen to make the money through illegitimate means.