5 ms·
This reads like a Ponzi scheme, if you consider the tenants as investors.
by dharmab 5y ago
This reads like a Ponzi scheme, if you consider the tenants as investors.
- ethbr0 5y agoIn a country with the third highest population density in the world and a solid advanced economy? (discounting city-states and low-population states) There are worse places to make that bet.
- seanmcdirmid 5y agoIf everyone makes the same bet, it can still lead to disaster (real estate must rise! Let's all speculate on real estate! --> eventual disaster). Or let's put it this way: a rational bet is something like, this thing is worth $50 now, it will be worth at least $100 later. An irrational bet is one like "this thing will be worth more over and over again!" If everyone things like that, then the thing's price will keep rising until the bubble bursts.
- jimbokun 5y agoThat sounds like the reasoning used in the US before the big 2008 housing market crash.
- ethbr0 5y agoThe US is not #3 in population density. ;)
- ranguna 5y agoThat doesn't matter, it's just a matter of time before it crashes imo.
- ethbr0 5y agoThe fundamental reason the US housing market crashed was that mortgages were written on properties that couldn't be sustained by income. South Korea has two characteristics that directly impact that: scarcity of land (relative to population) and a solid, world-leading economy in many high margin industries. It's not inconceivable property with such qualities could increase in value forever, and still be properly valued. So saying "Just like 2008 US" is a pretty pithy distillation of a number of complicated factors.