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How does it put up a barrier to rent seekers, it makes homes less affordable, which impacts the poorer people more. The rich can but the homes. The poor still n

How does it put up a barrier to rent seekers, it makes homes less affordable, which impacts the poorer people more. The rich can but the homes. The poor still need somewhere to live and so tent the homes, they're paying more just they're helping wealth move to the bankers more as well as the property owners. Allowing ownership of houses as an investment is just wrong. (The usual response to this is that you need investors or housing won't be built. The idea no-one would pay for a house to be built is silly, but we also have not-for profit housing associations.)

ianai 4y ago
Higher rates mean lower property values - and lower property values mean the rent/mortgage trade off pushes rents lower. It’s instructive to look up how much those SFHs rent for and compare it to local apartment complexes. There’s a huge premium. (And it’s of note that dealing with renting a SFH is possibly a worse experience than renting from a complex. Large enough complexes have maintenance staff and professional management. Someone renting a SFH might well have just that unit to rent - amateur hour. Or they could be a corporation but because you’re just one unit in probably a more spread out population of properties the renter might well experience lowered services from the property management.) I do agree the investment activity we’ve seen in simply hoarding up SFH properties for investment is deeply problematic. There are all sorts of ways to push the market back towards owner occupiers. It’d also be nice if it was a standard thing for working people to be able to make it to public local government meetings. Those tend to be timed when working people are at work. That could help something’s, but there’s probably still be a lot of NIMBYism…
- ethbr0 4y ago
  In the US at least, higher rates would seem to advantage owner-occupiers over SFH investors. It's harder for both to purchase, but investors are also heavily leveraged and fighting investment alternatives in a higher-rate environment.
  - ianai 4y ago
    Right, the average American lives in a home for something like 7 years and probably decides to move because of things unrelated to interest rates (life events, mood). But the investors are living in the financial world. They’ve not traditionally swamped the SFH market which suggests it’s not a natural choice.
mym1990 4y ago
If you are looking to rental properties as an investment, the interest rate is a large part of the cost of doing business. If you think that you can make 10% renting out a property but the interest rate is 8%, that is a pretty slim margin for something with so much overhead. If you think you can make 10% and the rate is 2%, that a bit more juicy. Because high interest rates can reduce demand, in a vacuum you would also see a reduction in the price of the property, making them more affordable. Of course this price is also impacted by countless other things, builder velocity being one of them, so in the real world it takes time to sort out. The 70s, 80s, 90s had relatively stable home ownership rates despite very high interest rates. In 2016 the US reached a bottom in home ownership at 62.9 despite historically low rates. BTW I was not referring to rich people living in their homes that they got with high interest rates, the comment was specifically towards investment property. Definitely agree that hoarding properties is out of hand.

ianai 4y ago

Higher rates mean lower property values - and lower property values mean the rent/mortgage trade off pushes rents lower. It’s instructive to look up how much those SFHs rent for and compare it to local apartment complexes. There’s a huge premium. (And it’s of note that dealing with renting a SFH is possibly a worse experience than renting from a complex. Large enough complexes have maintenance staff and professional management. Someone renting a SFH might well have just that unit to rent - amateur hour. Or they could be a corporation but because you’re just one unit in probably a more spread out population of properties the renter might well experience lowered services from the property management.) I do agree the investment activity we’ve seen in simply hoarding up SFH properties for investment is deeply problematic. There are all sorts of ways to push the market back towards owner occupiers. It’d also be nice if it was a standard thing for working people to be able to make it to public local government meetings. Those tend to be timed when working people are at work. That could help something’s, but there’s probably still be a lot of NIMBYism…

ethbr0 4y ago
In the US at least, higher rates would seem to advantage owner-occupiers over SFH investors. It's harder for both to purchase, but investors are also heavily leveraged and fighting investment alternatives in a higher-rate environment.
- ianai 4y ago
  Right, the average American lives in a home for something like 7 years and probably decides to move because of things unrelated to interest rates (life events, mood). But the investors are living in the financial world. They’ve not traditionally swamped the SFH market which suggests it’s not a natural choice.

mym1990 4y ago

If you are looking to rental properties as an investment, the interest rate is a large part of the cost of doing business. If you think that you can make 10% renting out a property but the interest rate is 8%, that is a pretty slim margin for something with so much overhead. If you think you can make 10% and the rate is 2%, that a bit more juicy. Because high interest rates can reduce demand, in a vacuum you would also see a reduction in the price of the property, making them more affordable. Of course this price is also impacted by countless other things, builder velocity being one of them, so in the real world it takes time to sort out. The 70s, 80s, 90s had relatively stable home ownership rates despite very high interest rates. In 2016 the US reached a bottom in home ownership at 62.9 despite historically low rates. BTW I was not referring to rich people living in their homes that they got with high interest rates, the comment was specifically towards investment property. Definitely agree that hoarding properties is out of hand.