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If prices were going down would things be better? You bought a 500,000 and in ten years it will be worth 100,000 would you still make that investment? Everyon

by ipaddr 5y ago

If prices were going down would things be better? You bought a 500,000 and in ten years it will be worth 100,000 would you still make that investment? Everyone wants prices to remain the same forever. That takes a neutral population growth or more supply

ClumsyPilot 5y ago
Certainly yes, it would be better - the value of a car goes down, do you still make an 'investment'? No, you buy a car if you need a car, we don't call buying a car 'investment', we don't encourage people to hoard cars they don't need, it contributes nothing to the economy. The optimal situation is for cars and houses to be as cheap as possible relative to earnings, that's what we call economic growth and improved quality of life.
- seanmcdirmid 5y ago
  Housing (the structures) depreciates in Japan now of days, and so they mostly don’t have this problem.
imtringued 5y ago
>If prices were going down would things be better? You bought a 500,000 and in ten years it will be worth 100,000 would you still make that investment? The idea that holding a property and doing absolutely nothing with it is an "investment" is absurd. The only people who would buy that home are those who want to live in it or who want to rent it out to someone who wants to live in it. No I wouldn't make that "investment". I would just rent the property out without "investing" the property.
andrepd 5y ago
>investment That's exactly the problem right there. A house can be a place to live or an investment, but not both. I myself think it's a bit to silly to spend labour and resources building a concrete box for the latter purpose, so I'd much rather houses fulfill their purpose as homes for people to live in.
- panarky 5y ago
  > but not both Certainly a place to live can also be an investment. Just like a work of art can also be an investment. And a plumbing business can be an investment and also fix your pipes.
  - ClumsyPilot 5y ago
    You missed the point - a plumbing business is an investment, just like a construction business. But no-one buys an old set of pipes and calls that an investment, and we understand that would be dumb. If houses are to be an investment, their prices will keep rising and they become unaffordable. When consumer goods themselves are an investment, standards of living fall
mellavora 5y ago
I've read that in many Asian countries houses are seen as a depreciating asset. And I've noticed that in the US, the observations that cars are typically depreciating assets never really stopped people from buying them.
tsimionescu 5y ago
By this logic no one would buy food, as it drastically depreciates in a minuscule amount of time. The real economy is the one that fulfills people's needs. Real-estate investment is parasitic to the real economy - it locks money away and artificially increases the price of a basic necessity. This has always been recognized in even basic economics with the concept of "rent-seeking" - unproductive activity that still makes money, such as literally charging rent.

by ipaddr 5y ago

ClumsyPilot 5y ago

Certainly yes, it would be better - the value of a car goes down, do you still make an 'investment'? No, you buy a car if you need a car, we don't call buying a car 'investment', we don't encourage people to hoard cars they don't need, it contributes nothing to the economy. The optimal situation is for cars and houses to be as cheap as possible relative to earnings, that's what we call economic growth and improved quality of life.

seanmcdirmid 5y ago
Housing (the structures) depreciates in Japan now of days, and so they mostly don’t have this problem.

imtringued 5y ago

>If prices were going down would things be better? You bought a 500,000 and in ten years it will be worth 100,000 would you still make that investment? The idea that holding a property and doing absolutely nothing with it is an "investment" is absurd. The only people who would buy that home are those who want to live in it or who want to rent it out to someone who wants to live in it. No I wouldn't make that "investment". I would just rent the property out without "investing" the property.

andrepd 5y ago

>investment That's exactly the problem right there. A house can be a place to live or an investment, but not both. I myself think it's a bit to silly to spend labour and resources building a concrete box for the latter purpose, so I'd much rather houses fulfill their purpose as homes for people to live in.

panarky 5y ago
> but not both Certainly a place to live can also be an investment. Just like a work of art can also be an investment. And a plumbing business can be an investment and also fix your pipes.
- ClumsyPilot 5y ago
  You missed the point - a plumbing business is an investment, just like a construction business. But no-one buys an old set of pipes and calls that an investment, and we understand that would be dumb. If houses are to be an investment, their prices will keep rising and they become unaffordable. When consumer goods themselves are an investment, standards of living fall

mellavora 5y ago

I've read that in many Asian countries houses are seen as a depreciating asset. And I've noticed that in the US, the observations that cars are typically depreciating assets never really stopped people from buying them.

tsimionescu 5y ago

By this logic no one would buy food, as it drastically depreciates in a minuscule amount of time. The real economy is the one that fulfills people's needs. Real-estate investment is parasitic to the real economy - it locks money away and artificially increases the price of a basic necessity. This has always been recognized in even basic economics with the concept of "rent-seeking" - unproductive activity that still makes money, such as literally charging rent.