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I mean... it has to eventually. If my country has a population of 50 million and I build 800 million homes, will investors keep buying them all at above market

I mean... it has to eventually. If my country has a population of 50 million and I build 800 million homes, will investors keep buying them all at above market rates (read: more than I spent building them)? Then I can build 100 million more and keep collecting infinite money?

b3morales 5y ago
Yes, because they can keep shifting their imaginary money around and hedging their risk on paper until someone notices the music has stopped and the govt/rest of us are left holding the bag of turds again. (Cf. 2008)
- ryan93 5y ago
  Are you claiming Blackstone would continue to buy houses at current prices even with a 16fold increase in supply? In 2008 the government artificially backstopped loans not a free market fwiw
boplicity 5y ago
This can go on longer than you think; it leads to "ghost cities" -- huge areas full of empty housing bought by speculators. https://allthatsinteresting.com/chinese-ghost-cities https://allthatsinteresting.com/chinese-ghost-cities
- joshlemer 5y ago
  But I bet rent is pretty cheap in those cities no?
- rwmj 5y ago
  The other part should be a supertax on properties which are empty for more than 6 months.
- toast0 5y ago
  It's a lot easier to build housing in the middle of nowhere USA; but there's not a large problem of ghost cities. There's certainly a lot of sprawl, but not large new construction ghost cities; although there was some overbuilding in some areas into the 2008 housing crash, and some areas where construction stalled or stopped mid-build as a result, since either the builder could no longer finance finishing or it didn't make economic sense to do so at that time. China has a lot of disconnected incentives that help it make economic sense for the participants to build and buy into a ghost city that I don't think are present in the US and Canada. If ghost cities are a real concern, you could punitively tax vacant housing that's not offered for lease or sale, and limit housing starts when housing offered for sale or lease was above some threshold price. Or you could do something like a deposit per housing start, paid back over time to the owner or occupant while occupied.
- crooked-v 5y ago
  Those "ghost cities" have been fairly consistently been filling in over time. Some of the originally-reported ones are by now more or less completely populated and are now just... cities.
  - a_shovel 5y ago
    That sounds interesting. Do you have an article or something about that?

b3morales 5y ago

Yes, because they can keep shifting their imaginary money around and hedging their risk on paper until someone notices the music has stopped and the govt/rest of us are left holding the bag of turds again. (Cf. 2008)

ryan93 5y ago
Are you claiming Blackstone would continue to buy houses at current prices even with a 16fold increase in supply? In 2008 the government artificially backstopped loans not a free market fwiw

boplicity 5y ago

This can go on longer than you think; it leads to "ghost cities" -- huge areas full of empty housing bought by speculators. https://allthatsinteresting.com/chinese-ghost-cities https://allthatsinteresting.com/chinese-ghost-cities

joshlemer 5y ago
But I bet rent is pretty cheap in those cities no?
rwmj 5y ago
The other part should be a supertax on properties which are empty for more than 6 months.
toast0 5y ago
It's a lot easier to build housing in the middle of nowhere USA; but there's not a large problem of ghost cities. There's certainly a lot of sprawl, but not large new construction ghost cities; although there was some overbuilding in some areas into the 2008 housing crash, and some areas where construction stalled or stopped mid-build as a result, since either the builder could no longer finance finishing or it didn't make economic sense to do so at that time. China has a lot of disconnected incentives that help it make economic sense for the participants to build and buy into a ghost city that I don't think are present in the US and Canada. If ghost cities are a real concern, you could punitively tax vacant housing that's not offered for lease or sale, and limit housing starts when housing offered for sale or lease was above some threshold price. Or you could do something like a deposit per housing start, paid back over time to the owner or occupant while occupied.
crooked-v 5y ago
Those "ghost cities" have been fairly consistently been filling in over time. Some of the originally-reported ones are by now more or less completely populated and are now just... cities.
- a_shovel 5y ago
  That sounds interesting. Do you have an article or something about that?