8 ms·

>The main issue is that there is just nowhere near enough housing to keep up with population increases, seemingly anywhere in the Western world. Not sure about

>The main issue is that there is just nowhere near enough housing to keep up with population increases, seemingly anywhere in the Western world. Not sure about Sweden but at least here (Spain) housing being bought for investment is much more of a problem than physical unavailability. And I don't mean it as a store of value: People (and companies) buy houses to rent them and have the rent payments pay for the mortgage payments, since it's basically free money - For those that can get a mortgage, since it's pretty much mandatory to pay 20% of the cost upfront (plus taxes). Basic needs really shouldn't be investment material.

kubb 5y ago
This guy gets it, others seem to be making incredible effort not to see it.
_vbnz 5y ago
I agree completely, at least here in Sweden it's harder to rent flats out, so this is less common (it might change next year though when the conservatives/nationalists win). IMO I'd make renting restricted to government monopoly (like alcohol sales in Sweden, and the old first-hand contracts system), and property ownership restricted to your residence only, and then build much, much more whilst stopping mass immigration (it's crazy to invite 2+ million refugees when there isn't enough housing already!).
- jseban 5y ago
  Renting is basically already restricted to government policy in Stockholm, and the result is 15 years waiting time to get a flat.
  - nivenkos 5y ago
    Yeah, the first-hand contracts system is a disaster atm. But note that waiting time only applies to first-hand contracts. You can still rent second-hand. The idea would be to build much more, and buy up the former second-hand places.
sokoloff 5y ago
> Basic needs really shouldn't be investment material. Companies providing and selling food, energy, and consumer staples are investment materials. I don’t get why housing should be a special carve-out and don’t see a workable answer to how to provide food for everyone while banning all investment in companies that grow or sell food. These companies are invested in precisely because these are basic needs. The company gets the capital it needs to operate, consumers get a reliable supply of food, energy, and clothing, employees get steady jobs providing these staples, investors get a relatively safe store of value and some income. Who exactly loses in these investments in supply basic food, energy, and consumer staples?
- Aeolun 5y ago
  But this clearly isn’t true for housing. Landlords keep buying up more and more, supply only goes down, and the prices keep going up.
  - Panzer04 5y ago
    And are the landlords just leaving the house empty for the hell of it? Or is it being rented out to people? I know with one is more likely. The thing is, housing is a surprisingly flexible commodity (too expensive, people live with parents/share, and then move back out if prices fall) , and encouraging everyone to buy a full on house in a suburb is a recipe to drive expensive housing.
    - ChuckNorris89 5y ago
      >And are the landlords just leaving the house empty for the hell of it? No, but a landlord who got into the market early when properties were dirt cheap can leverage that and buy more and more for renting them out, reducing the supply and increasing the competition if you want to buy your first property and not be a renter your whole life. You know, like when you want to settle down and have kids, you're gonna be out-muscled by a landlord who already has 3 properties and is is looking to buy 2 more. >housing is a surprisingly flexible commodity (too expensive, people live with parents/share, and then move back out if prices fall) The thing is this is one of the reason why birth rates are so low in rich western cities. How can you expect people to start families if you expect adults to live in shared accomodations or move in with their parents? Having access to cheap, spacious housing that's just for living and not part of someone's investment vehicle, would definitely make "nesting" an enticing proposition for young adults, like it was for the boomer generation. But if you expect them to bum around between living with roommates and living with their parents like adolescents, and their only hope of nesting being to grind away after years in university at some soul-sucking job 40+ hours/week plus commutes just to afford a bank loan for a shoe-box that they'll have to pay off till they die, then of course they'll realize this expectation of their life is a scammy wage-salve trap and say "to hell with that, I'd rather stay single, childless and free and spend my time and money on travelling, clubbing, netflix, meme-stocks and videogames". But of course, fat chance to get governments to admit their policies of enriching the banks, property investors and the older owning class by squeezing the young is the cause of this. To them, the real reason why the young can't afford to settle down is because "these pesky millennials and zoomers spend all their money on iphones and avocado toast, so to fix this we'll allow uncontrolled mass immigration from the third world". Housing can't be an affordable necessity for starting a family that everyone should have access to while at the same time being an investment vehicle design to enrich their owners. It's either one or the other and most of the west has chosen the latter while talking how the former is more important. In Austria, the goverment isn't even hiding the fact that housing is officially an investment vehicle, with the conservative party throwing the blame back on the people for not having bought properties as the reason why they stay poor and can't afford to keep up with rent increases. Despicable!
easytiger 5y ago
If it's so easy, do it yourself then? Who do you think funds the building and maintenance of property?
- kubb 5y ago
  The people who rent it after its built, duh? Not everyone can buy property because not everyone is sitting on unallocated capital.
  - ensignavenger 5y ago
    Housing cooperatives are a thing, most people don't seem very interested, but if you are, you can certainly get some other like-minded individuals together and start one!
  - easytiger 5y ago
    > unallocated capital. i imagine one day when you have " unallocated capital. " this will be a distant embarassing memory for you
- torben-friis 5y ago
  >If it's so easy, do it yourself then? A decent apartment here costs the equivalent of 20 times the average income. you need to have roughly 25% of the cost for a mortgage to be granted, according to local regulation, which would be 5 times your yearly salary. Try to save that considering that just renting (while you save) will easily take 50-60% of your income. Even those who can do it will only achieve it after more than a decade of paying through the nose.
  - easytiger 5y ago
    > A decent apartment here costs the equivalent of 20 times the average income And there will be places where that will not be true
eaxix 5y ago
The role of investors in the economy is ultimately to finance new development. It's easy to see how this works when an investor is the first owner. If it weren't for the initial investor with the required capital and/or credit to make the purchase, the housing likely wouldn't have been built in the first place. Now you may ask, what is the role of investors who buy up older properties? They provide valuable liquidity to the market, which provides an incentive for the initial investors to invest. Both investors and regular homeowners alike prefer to own a property that they can easily sell on short notice if needed. Without investors buying up "second-hand" properties, it would be harder to sell a property making homes a less attractive investment. Fewer people would buy new properties, resulting in less new housing being built. All of this extra development spurred by investment money pouring in leads to lower rents for everyone since rents are pure supply/demand. If you build more, rents will go down.
- jowsie 5y ago
  This simply isn't true in the UK. You can't drive 5 miles without seeing some giant new sprawl of new build housing, yet rent is increasing year on year.
  - eaxix 5y ago
    Then perhaps building even more is what's needed to keep up with the demand. If you keep building at a fast enough pace, then at some point, there will be more housing units than prospective renters, landlords start having trouble finding tenants, and that's when prices will inevitably fall. If demand is rising, then housing needs to be built at an even faster rate. Rising demand can be very hard to keep up with, and I believe that's what we're experiencing right now. I don't live in the UK, so I'm not too familiar with the specifics there, but what seems to be happening worldwide is that young people are flocking to cities. I'm fairly young myself and I don't know anyone my age who would like to live in a small town in the middle of nowhere - everyone I know was either born in a larger city or moved to one. In the past, if you were born in a small town, maybe there was a factory nearby and you'd end up working there. Only a few would move out. These days the factory has most likely closed, and the jobs were shipped off to China. Even if, by some miracle, it happened to still be open, most young people wouldn't want to work there anyway. Young people tend to be more educated and want jobs where they can make use of their education. These jobs tend to be located in big cities. There are only two ways out of this mess: The first one is to satisfy the demand -- that means building more, a lot more. No Western country is currently building enough. The demand is so huge that the only way to satisfy it would be very high-density housing. I'm talking 30+ stories apartment buildings everywhere like you see in East Asia. This would have to be accompanied by enough public transport because at that population density, you'd need super wide highways everywhere to support people driving cars. I don't think allowing such construction is politically feasible, however, as it would completely change the character of existing cities. The other one is to embrace remote work and revitalize small towns. Remote work is not enough since people still demand the amenities cities provide. These are lacking precisely because so many young people have left, causing a negative feedback loop. We need trendy cafes and restaurants, we need WeWork locations, and for young families, we need high-quality school/preschool/daycare. If small towns "gentrify" with such amenities causing young remote-workers to start moving there, this may significantly ease the demand pressure on city housing. The best solution is probably a combination of the above two.
rufus_foreman 5y ago
>> Basic needs really shouldn't be investment material If you make something less profitable, less of it will be provided.
- torben-friis 5y ago
  legitimate (non-speculative) demand is more than enough to fuel construction. People will still need to live somewhere, and therefore will pay for it. They just won't need to pay stupidly high prices because half the offer is hoarded by large companies to artificially inflate the price.

kubb 5y ago

This guy gets it, others seem to be making incredible effort not to see it.

_vbnz 5y ago

I agree completely, at least here in Sweden it's harder to rent flats out, so this is less common (it might change next year though when the conservatives/nationalists win). IMO I'd make renting restricted to government monopoly (like alcohol sales in Sweden, and the old first-hand contracts system), and property ownership restricted to your residence only, and then build much, much more whilst stopping mass immigration (it's crazy to invite 2+ million refugees when there isn't enough housing already!).

jseban 5y ago
Renting is basically already restricted to government policy in Stockholm, and the result is 15 years waiting time to get a flat.
- nivenkos 5y ago
  Yeah, the first-hand contracts system is a disaster atm. But note that waiting time only applies to first-hand contracts. You can still rent second-hand. The idea would be to build much more, and buy up the former second-hand places.

sokoloff 5y ago

> Basic needs really shouldn't be investment material. Companies providing and selling food, energy, and consumer staples are investment materials. I don’t get why housing should be a special carve-out and don’t see a workable answer to how to provide food for everyone while banning all investment in companies that grow or sell food. These companies are invested in precisely because these are basic needs. The company gets the capital it needs to operate, consumers get a reliable supply of food, energy, and clothing, employees get steady jobs providing these staples, investors get a relatively safe store of value and some income. Who exactly loses in these investments in supply basic food, energy, and consumer staples?

Aeolun 5y ago
But this clearly isn’t true for housing. Landlords keep buying up more and more, supply only goes down, and the prices keep going up.
- Panzer04 5y ago
  And are the landlords just leaving the house empty for the hell of it? Or is it being rented out to people? I know with one is more likely. The thing is, housing is a surprisingly flexible commodity (too expensive, people live with parents/share, and then move back out if prices fall) , and encouraging everyone to buy a full on house in a suburb is a recipe to drive expensive housing.
  - ChuckNorris89 5y ago
    >And are the landlords just leaving the house empty for the hell of it? No, but a landlord who got into the market early when properties were dirt cheap can leverage that and buy more and more for renting them out, reducing the supply and increasing the competition if you want to buy your first property and not be a renter your whole life. You know, like when you want to settle down and have kids, you're gonna be out-muscled by a landlord who already has 3 properties and is is looking to buy 2 more. >housing is a surprisingly flexible commodity (too expensive, people live with parents/share, and then move back out if prices fall) The thing is this is one of the reason why birth rates are so low in rich western cities. How can you expect people to start families if you expect adults to live in shared accomodations or move in with their parents? Having access to cheap, spacious housing that's just for living and not part of someone's investment vehicle, would definitely make "nesting" an enticing proposition for young adults, like it was for the boomer generation. But if you expect them to bum around between living with roommates and living with their parents like adolescents, and their only hope of nesting being to grind away after years in university at some soul-sucking job 40+ hours/week plus commutes just to afford a bank loan for a shoe-box that they'll have to pay off till they die, then of course they'll realize this expectation of their life is a scammy wage-salve trap and say "to hell with that, I'd rather stay single, childless and free and spend my time and money on travelling, clubbing, netflix, meme-stocks and videogames". But of course, fat chance to get governments to admit their policies of enriching the banks, property investors and the older owning class by squeezing the young is the cause of this. To them, the real reason why the young can't afford to settle down is because "these pesky millennials and zoomers spend all their money on iphones and avocado toast, so to fix this we'll allow uncontrolled mass immigration from the third world". Housing can't be an affordable necessity for starting a family that everyone should have access to while at the same time being an investment vehicle design to enrich their owners. It's either one or the other and most of the west has chosen the latter while talking how the former is more important. In Austria, the goverment isn't even hiding the fact that housing is officially an investment vehicle, with the conservative party throwing the blame back on the people for not having bought properties as the reason why they stay poor and can't afford to keep up with rent increases. Despicable!

easytiger 5y ago

If it's so easy, do it yourself then? Who do you think funds the building and maintenance of property?

kubb 5y ago
The people who rent it after its built, duh? Not everyone can buy property because not everyone is sitting on unallocated capital.
- ensignavenger 5y ago
  Housing cooperatives are a thing, most people don't seem very interested, but if you are, you can certainly get some other like-minded individuals together and start one!
- easytiger 5y ago
  > unallocated capital. i imagine one day when you have " unallocated capital. " this will be a distant embarassing memory for you
torben-friis 5y ago
>If it's so easy, do it yourself then? A decent apartment here costs the equivalent of 20 times the average income. you need to have roughly 25% of the cost for a mortgage to be granted, according to local regulation, which would be 5 times your yearly salary. Try to save that considering that just renting (while you save) will easily take 50-60% of your income. Even those who can do it will only achieve it after more than a decade of paying through the nose.
- easytiger 5y ago
  > A decent apartment here costs the equivalent of 20 times the average income And there will be places where that will not be true

eaxix 5y ago

The role of investors in the economy is ultimately to finance new development. It's easy to see how this works when an investor is the first owner. If it weren't for the initial investor with the required capital and/or credit to make the purchase, the housing likely wouldn't have been built in the first place. Now you may ask, what is the role of investors who buy up older properties? They provide valuable liquidity to the market, which provides an incentive for the initial investors to invest. Both investors and regular homeowners alike prefer to own a property that they can easily sell on short notice if needed. Without investors buying up "second-hand" properties, it would be harder to sell a property making homes a less attractive investment. Fewer people would buy new properties, resulting in less new housing being built. All of this extra development spurred by investment money pouring in leads to lower rents for everyone since rents are pure supply/demand. If you build more, rents will go down.

jowsie 5y ago
This simply isn't true in the UK. You can't drive 5 miles without seeing some giant new sprawl of new build housing, yet rent is increasing year on year.
- eaxix 5y ago
  Then perhaps building even more is what's needed to keep up with the demand. If you keep building at a fast enough pace, then at some point, there will be more housing units than prospective renters, landlords start having trouble finding tenants, and that's when prices will inevitably fall. If demand is rising, then housing needs to be built at an even faster rate. Rising demand can be very hard to keep up with, and I believe that's what we're experiencing right now. I don't live in the UK, so I'm not too familiar with the specifics there, but what seems to be happening worldwide is that young people are flocking to cities. I'm fairly young myself and I don't know anyone my age who would like to live in a small town in the middle of nowhere - everyone I know was either born in a larger city or moved to one. In the past, if you were born in a small town, maybe there was a factory nearby and you'd end up working there. Only a few would move out. These days the factory has most likely closed, and the jobs were shipped off to China. Even if, by some miracle, it happened to still be open, most young people wouldn't want to work there anyway. Young people tend to be more educated and want jobs where they can make use of their education. These jobs tend to be located in big cities. There are only two ways out of this mess: The first one is to satisfy the demand -- that means building more, a lot more. No Western country is currently building enough. The demand is so huge that the only way to satisfy it would be very high-density housing. I'm talking 30+ stories apartment buildings everywhere like you see in East Asia. This would have to be accompanied by enough public transport because at that population density, you'd need super wide highways everywhere to support people driving cars. I don't think allowing such construction is politically feasible, however, as it would completely change the character of existing cities. The other one is to embrace remote work and revitalize small towns. Remote work is not enough since people still demand the amenities cities provide. These are lacking precisely because so many young people have left, causing a negative feedback loop. We need trendy cafes and restaurants, we need WeWork locations, and for young families, we need high-quality school/preschool/daycare. If small towns "gentrify" with such amenities causing young remote-workers to start moving there, this may significantly ease the demand pressure on city housing. The best solution is probably a combination of the above two.

rufus_foreman 5y ago

>> Basic needs really shouldn't be investment material If you make something less profitable, less of it will be provided.

torben-friis 5y ago
legitimate (non-speculative) demand is more than enough to fuel construction. People will still need to live somewhere, and therefore will pay for it. They just won't need to pay stupidly high prices because half the offer is hoarded by large companies to artificially inflate the price.