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Timing is everything. Being able to buy a house and live in it before you can pay for it is a substantial benefit. This is what loans do. There's no reason why

Timing is everything. Being able to buy a house and live in it before you can pay for it is a substantial benefit. This is what loans do. There's no reason why it wouldn't cause houses to be built earlier than they would otherwise. I thought this was interesting: > Bricks — actual bricks, not stacks of cash — are another common savings mechanism, especially for working-class Argentinians. The value of bricks is fairly stable, and they’re useful to a family building out their house. Argentina doesn’t have a mortgage industry, and thus buying a pallet of bricks each time you get a paycheck is an effective way to pay for your home in installments. > (Bricks aren’t fully monetized, in that I don’t think people buy bricks and then sell them later, so people only use this method of saving when they actually have something they want to use the bricks for.) > As you can imagine, there are challenges that come with saving in wads of $100 bills or stacks of bricks. For one thing, they take up a lot of space. Worse, your life savings are also at constant risk of theft, damage, and fire. If something does happen, the bills are not insured or protected by any institution; they’re just gone. https://www.freethink.com/hard-tech/crypto-argentina-black-market-cash https://www.freethink.com/hard-tech/crypto-argentina-black-m...

roenxi 4y ago
Although that is a desirable use case; the important question to me is whether that is actually what is happening. I'm from Australia and our housing case is much worse than in most of the world. I know a lot of people who have enormous mortgages, and I can swear to the fact that none of the money they borrowed went to construction. They were paying to queue-jump people more like me who refuse to deal in debt. Which I can respect. But I think debt avoidance strategies will win out in the long term, on average. Unless they cheat and use debt to get ahead, then get it discharged by some political trick.
- skybrian 4y ago
  Why would you say that new housing isn't being built where you live? Seems like the demand is there?
  - roenxi 4y ago
    I expect it has been made practically illegal to build new apartment blocks in desirable locations. There isn't a lot of construction relative to the amount of debt being handed out.
- alvah 4y ago
  “But I think debt avoidance strategies will win out in the long term, on average.” I agree with you, but you have to be prepared for the long term being longer than a human lifespan. For example, house prices in the Netherlands were arguably at bubble levels for almost the entire 18th century.

roenxi 4y ago

Although that is a desirable use case; the important question to me is whether that is actually what is happening. I'm from Australia and our housing case is much worse than in most of the world. I know a lot of people who have enormous mortgages, and I can swear to the fact that none of the money they borrowed went to construction. They were paying to queue-jump people more like me who refuse to deal in debt. Which I can respect. But I think debt avoidance strategies will win out in the long term, on average. Unless they cheat and use debt to get ahead, then get it discharged by some political trick.

skybrian 4y ago
Why would you say that new housing isn't being built where you live? Seems like the demand is there?
- roenxi 4y ago
  I expect it has been made practically illegal to build new apartment blocks in desirable locations. There isn't a lot of construction relative to the amount of debt being handed out.
alvah 4y ago
“But I think debt avoidance strategies will win out in the long term, on average.” I agree with you, but you have to be prepared for the long term being longer than a human lifespan. For example, house prices in the Netherlands were arguably at bubble levels for almost the entire 18th century.