2 ms·
A house goes to the highest bidder, so if you decrease the cost of capital for some participants you increase the price for everyone. I agree that it’s not a pe
by paulgb 5y ago
A house goes to the highest bidder, so if you decrease the cost of capital for some participants you increase the price for everyone. I agree that it’s not a perfect transfer, but I suspect it’s a pretty good one, on the assumption that first-time buyers represent most of the capital entering the system. E.g. someone buying a first house for $500k puts $500k in the market, whereas someone moving from a $500k house to a $600k house is only bringing $100k of new capital into the system.
I realize that people also leave the system, so maybe my logic is flawed.
- Beldin 5y agoThey tried something like this in. nl and that was pretty much exactly what happened: make some of the cash-limited house buyers be able to pay more increased prices. The desired effect typically is not achieved because such measures are aimed at the least affluent buyers. Giving those ways to bid more will not decrease prices. It just means someone else is now the least affluent buyer - typically not investors.