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In general I agree, that the root cause tends to be a supply constraint. Even if there were a bunch of people buying up houses, at least in theory that should
by mpalczewski 4y ago
In general I agree, that the root cause tends to be a supply constraint. Even if there were a bunch of people buying up houses, at least in theory that should make rents go down.
However, in places like Vancouver people are buying up property as a place to park money and they remain unoccupied. Policies like additional taxes on unoccupied or secondary residences. Seem like one good way of adding supply.
- danielmarkbruce 4y agoSimilar happens in Sydney. There are a lot of foreign people looking for safe havens for their cash. I can't blame them (I'd do the same), but it is problematic for the people living there because it does reduce supply.
- weeksie 4y agoThe easiest way to solve that is by making housing a less attractive investment, which you can do by building a lot more of it. Otherwise you're stuck crafting clever anti-investment legislation which may or may not work and may or may not create weird distortions due to some unforeseen consequence of how the regulations are worded.
- HeyImAlex 4y agoI feel like this works for housing but not really for land? As density increases the cost of housing should go down (more houses), but the cost of land would go up (ability to build more houses on the same plot). I’m imagining the house from Up in the middle of manhattan; you could never build enough housing to make that a bad investment.
- andrewmutz 4y agoIf they buy properties as an investment, why not rent them out? If you dont want the hassle, there are property management companies that will handle everything for you.
- danielmarkbruce 4y agoIt's more a place to store value - they aren't looking for a return on it per se. It also adds complexity tax wise. If you have a lot of money in a jurisdiction where it could "disappear", just dumping it in real estate in a safe jurisdiction is attractive.