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Just to add that in Australia the housing market is also going nuts and presumably foreign buyers are suppressed or absent due to Covid. It is really quite bad

by Gatsky 5y ago

Just to add that in Australia the housing market is also going nuts and presumably foreign buyers are suppressed or absent due to Covid. It is really quite bad, and nobody knows what to do about it. It is lose-lose now because there are the people who can't buy a house, and then there are those who sacrificed everything to buy a house. You can't help one group without really hurting the other. It will really hit home when the people who can't buy a house get older, and stop work. Two options come to mind: - Adjust policy to slow the rate of increase such that wages and income will catch up. This will take 20 years or more of course, resulting in an 'unhoused' generation of people. - Make some kind of large structural change which reduces prices coupled with debt forgiveness. This will still screw a lot of overcapitalised people. I don't think massively increasing urban density will work in Australia (or NZ, or Canada), which seems to be the Japanese solution. A third option is to try and reduce concentration in major cities, and attract people to regional areas where housing supply and demand are better matched and prices are much lower. There is actually an opportunity to do this because of Covid - more interest in remove work and less migration. Austrlia, NZ and Canada have a lot space after all. But the reality is, our listless government won't do anything, and the political pressure from the older well-housed generations protecting their wealth is too great.

voisin 5y ago
> A third option is to try and reduce concentration in major cities, and attract people to regional areas where housing supply and demand are better matched and prices are much lower. In Canada there is essentially no where that fits this description if you look at price to income ratios. The price increases in tiny towns in the middle of nowhere have increased as dramatically as in major centres, from a lower starting point. The locals earn far less and cannot keep up with the prices.
rtpg 5y ago
Why don’t you think increasing supply like the Japanese solution would work?
- Gatsky 5y ago
  In Australia anyway, there is a strongly ingrained cultural norm around the backyard. There is also the NIMBYism in the inner city suburbs which should be densified. These suburbs are filled with wealthy people who will not just acquiesce to high density developments and decades of transport infrastructure revision. Finally there are heritage listings. These are buildings which are designated as having cultural significance. You can't knock them down, they have to be maintained, often at great expense. Councils are militant about protecting heritage listings. On more than one occasion a stalemate develops and the owner of the property lets it sit for years and years until the heritage building essential falls down by itself. Yet when a new building is built, the council is happy for any sort of ugly box. Go figure.
- wheelinsupial 5y ago
  In BC, I don’t think increasing supply helps to increase ownership. I’ve seen some data from Stats Canada from the housing statistics program that shows the percent of owner occupied apartments is decreasing over time. From 60-70% to somewhere in the 40% range. I haven’t been able to find reliable numbers on the number of new condos coming in, but looking around the city it’s hard to believe that we would not be increasing supply. For example, I live in a condo / townhouse development that has 450 units; before this was built, there were 4 single family homes on the same land. Stats Canada is starting to put out information on multiple house owners. The majority of the multiple unit owners own within the same city as their primary residence. People who see the headlines speculate it’s cottage owners, but it’s really not the case. From anecdotes, the other driver of non-owner occupied apartments are people who live at home but are able to buy an apartment to rent out. They do this because housing keeps going up here and they want to build equity to be able to afford a house once they are married and move out of the family home.

by Gatsky 5y ago

voisin 5y ago

> A third option is to try and reduce concentration in major cities, and attract people to regional areas where housing supply and demand are better matched and prices are much lower. In Canada there is essentially no where that fits this description if you look at price to income ratios. The price increases in tiny towns in the middle of nowhere have increased as dramatically as in major centres, from a lower starting point. The locals earn far less and cannot keep up with the prices.

rtpg 5y ago

Why don’t you think increasing supply like the Japanese solution would work?

Gatsky 5y ago
In Australia anyway, there is a strongly ingrained cultural norm around the backyard. There is also the NIMBYism in the inner city suburbs which should be densified. These suburbs are filled with wealthy people who will not just acquiesce to high density developments and decades of transport infrastructure revision. Finally there are heritage listings. These are buildings which are designated as having cultural significance. You can't knock them down, they have to be maintained, often at great expense. Councils are militant about protecting heritage listings. On more than one occasion a stalemate develops and the owner of the property lets it sit for years and years until the heritage building essential falls down by itself. Yet when a new building is built, the council is happy for any sort of ugly box. Go figure.
wheelinsupial 5y ago
In BC, I don’t think increasing supply helps to increase ownership. I’ve seen some data from Stats Canada from the housing statistics program that shows the percent of owner occupied apartments is decreasing over time. From 60-70% to somewhere in the 40% range. I haven’t been able to find reliable numbers on the number of new condos coming in, but looking around the city it’s hard to believe that we would not be increasing supply. For example, I live in a condo / townhouse development that has 450 units; before this was built, there were 4 single family homes on the same land. Stats Canada is starting to put out information on multiple house owners. The majority of the multiple unit owners own within the same city as their primary residence. People who see the headlines speculate it’s cottage owners, but it’s really not the case. From anecdotes, the other driver of non-owner occupied apartments are people who live at home but are able to buy an apartment to rent out. They do this because housing keeps going up here and they want to build equity to be able to afford a house once they are married and move out of the family home.