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I believe we are in a time where everyone is milking the 90s-20s real estate bubble and no one wants to be first to fold. Internationally, not just on a per cou

I believe we are in a time where everyone is milking the 90s-20s real estate bubble and no one wants to be first to fold. Internationally, not just on a per country basis. As soon as say, French real estate collapses (or UK or USA or Germany etc), the whole rotten castle of cards will fold as well. If it doesn't you can enjoy the expensive property, but you won't be eating farmed foods, won't be in a clean environment and wont have nurses to look after you since no one can afford to be in any relative area and I mean just for shelter from the elements.

nemo44x 4y ago
Why would it collapse? There’s insatiable demand for extreme limited property. Interest rate hikes may lower the price of property but the interest will rise proportionately. Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.
- kshacker 4y ago
  You can twist the supply demand imbalance only so much. Go farther than required for longer than required, and some cracks will eventually show up. Like they did for Silicon Valley bank. So it is hard to say when those cracks appear since the global market is quite a big market and can sustain imbalances for a long time, but then the bigger the bubble the bigger the crash. Foreigner limits, tax on no. Residents, start of uncontrolled construction - these are only some ways I can think it may break and my ideas are based only on reading the internet, you never know what dynamics come and break the housing. Or they break the world or its money supply. Not trying to fear monger just saying the dance will end.
  - kfarr 4y ago
    I think the difference here is fundamentally there is insufficient supply for the demand of housing globally, or at least US, UK and EU. The previous generation made new builds extremely difficult or impossible in many jurisdictions.
    - ClumsyPilot 4y ago
      There is financial fuckerage driving prices far beyond what normal dynamics would allow.
    - baseline-shift 4y ago
      Yes, insane zoning limits in cities in the US since the 60s have indeed made it impossible to build near jobs. But there's abandoned medieval villages (no plumbing or electricity so far...) in hilly rural Italy.
      - rickydroll 4y ago
        zoning would not matter to my commute length unless I moved every time I changed jobs and had no dogs or human partners. I have made 30 years of compromises because of partners and pets. I've stayed at shitty jobs because good ones were too far away and I could not move. building near jobs is either building company towns or embedding classism and environmental injustice into property. would you live next door to a small nuke power plant because it was colocated with your office job? how about a refinery? a bsl3 lab? sewer treatment? or would you force those workers to live near their work and put them and all the dirty parts of civilization far away from the upper class clean places?
        Roritharr 4y ago
        I live next to a coal power plant. It's a tradeoff between my ability to pay the rent for a single family home with a garden and living close to a large city in Germany that gives our family the chance of job and education variety. Is it a good deal? Ask me in twenty years.
      - riffraff 4y ago
        > But there's abandoned medieval villages (no plumbing or electricity so far...) in hilly rural Italy. there's small towns with fine electricity and plumbing in rural Italy but they are de-populating anyway, cause most people want to live in/nearby cities as that is where money and opportunity generally is. The same everywhere I think (bar few cases like the Netherlands which are basically a single sprawl). Hungary just published their most recent census, and all of the country has depopulated in the last ten years except for Budapest. The big hope is that the trend will reverse with more remote-ization, but it's, well, a hope.
  - canadianfella 4y ago
    [dead]
- ianai 4y ago
  Eventually death, disease, or divorce will force properties to sell. That will move market values down. Meanwhile, my buddy’s mobile home manufacturer is back to being able to output a home in weeks. Construction has already fallen off a cliff-which makes sense given that’s the easiest to spin up/down of the market. The RE market is responding to the rates. Though, whether it’ll be enough is beyond my knowledge or possibly anyone else’s. If not, it’s precisely this sort of situation where change seems impossible that people can find the will to insist upon change. For renters, I suspect regulation and oversight would go a long way. It’s not going to create a NYC level inefficiency if gobbling up SFHs for rental properties is curtailed. (And I’ve heard of at least one story suggesting AirBnB rentals may be unable to rent at current prices/supply.) Nor would outlawing problematic practices create problems. In the west, people largely have a say in their governments. People just need to show up to elections and primaries with the demand that government work for them.
  - shagie 4y ago
    That assumes that the entities buying the housing are subject to death, disease, and divorce. From 2022: Investors bought a record share of homes in 2021. See where. - https://wapo.st/3ZDSZqm https://wapo.st/3ZDSZqm Strong Towns from 2022: Corporate Investors Own Nearly Half of This City's Residential Property - https://www.strongtowns.org/journal/2022/5/25/corporate-investors-own-nearly-half-of-this-citys-residential-property https://www.strongtowns.org/journal/2022/5/25/corporate-inve...
    - nebula8804 4y ago
      Damn, I did not expect that city to be Newark.
      - quags 4y ago
        When I went to Newark 20 years ago the road I was on looked like an abandoned waste land. Today the area has multi level family houses and looks more like a walkable area. Ascetically it looks much better - if it’s really a better place to live I don’t know. It’s likely it needed massive investor cash to rebuild so I’m honestly not surprised.
- baseline-shift 4y ago
  In Japan, there are empty houses going cheap as old people die off. In a few decades, possibly there will be some effect as the de-population bomb from lowered birthrates globally begin to affect real estate prices. Let's hope.
  - nemo44x 4y ago
    Japan is unique for a few reasons: 1) Very insulated culture with nearly no immigration coupled with low birth rates. 2) They build houses very differently. They aren't generally made to last centuries if taken care of and renovated. The strategy is to build small units cheaply and tare down after 2- years. It's like Ikea for homes. 3) I agree, depopulation is a problem. We really need to incentivize middle and upper middle class people to have large families.
    - rickydroll 4y ago
      item 3 is solving the wrong problem. people will have babies when they have space and feel like they can give their kids a better future. trying to move people into dense urban living it the opposite of space needed for kids. right now, we cannot give kids a better future in the current billionaire run world. we need to depopulate the billionaires and with the freed up wealth, fix the environmental problems so we have a chance at a future.
      - IG_Semmelweiss 4y ago
        Do.you have kids? "Having space and feeling like they can give them a better future" is about 1 thing. Money If you eliminated any of income taxes, or a combination of SS + reducing deficit spending (inflation), or the % of income going to heakthcare by eliminating its employee and employee subsidies (Medicares), there would be a populatiom boom. All you need to do is free people from having to make money, to meet basic needs. And people Will have children again. Instead, we have a social policy that everyone just needs to work in order to pay for the sins (and pleasure) of their previous generation. Yes. Those Caribbean cruises , FL homes & racetrack bets, are paid by the empty silence of hospital newborn wards across the country.
- csomar 4y ago
  If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming. And housing is expensive by design and not by constraint. I'm staying in KL, a comparatively cheap place by Western standards. The housing market is crap here from a seller perspective as you have an over-supply of condos. That, despite the large amount of foreigners living here. You can fix Western supply issue by allowing high-density condos nearby cities. Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses.
  - icelancer 4y ago
    > Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses. The people most vocally opposed to these buildings (which I support) in the United States are liberals/progressives who say those types of living situations are unacceptable, and hold out for the magic beans of large apartments/houses at well-below market prices. Unsurprisingly, this only makes prices go up.
    - neerd 4y ago
      [Citation needed]
  - f6v 4y ago
    > If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming. First off, what are they going to do? It’s the same in most big cities(1 million+). Second, those working remotely can always move from Munich to Leipzig (where OP can rent 3bd for the price of his Munich studio). I don’t see society collapse happening. Just need a bit of population redistribution.
  - jjav 4y ago
- mo_42 4y ago
  > Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen. Well, the economic landscape can change drastically. Compared to other assets real estate has quite some costs. With all the environmental regulations, for example, the EU is planning, real estate might be much less lucrative. For individual landlords, it might be even impossible as they don’t have any money for investment. I’m not dismissing your point. Just adding some balance.
- wizofaus 4y ago
  It's not implausible that changes in technology and life/work habits will ultimately make currently highly-attractive areas less so. And once population starts to fall in combination with minimal wage growth it's hard to see what would sustain current high prices. Ultimately it seems the primary driver behind property prices is the willingness of buyers to take on debt and for banks to issue it. If house prices did start to plateau/drop off over a sustained period with no obvious indicators of future growth then that willingness (particularly on behalf of banks) may well drop off pretty quickly too.
- plufz 4y ago
  I don’t know about your country. But in mine prices of property has not followed population growth, increased income or really anything that would make this growth sustainable. It has been a product of central banks setting way too low interest rates (and to a part lacking regulations).
  - nemo44x 4y ago
    Interest rates don’t really matter as much as you might think. Yes as rates go down the price a house sells for goes up. But the monthly payment stats the same as that’s how people buy houses. They figure out what they can spend easy month in principal, interest, and taxes and then shop and bid in the places they want to live, which almost always aligns with how much they can spend. Rising interest rates are good for cash buyers and banks.
    - Ekaros 4y ago
      Are actually rising rates good for banks? Didn't SVB fail due to rising rates? And the other banks might also have issues. They got deposits. They lend out money, but they locked the loans to certain rate. Now the depositors can get better offers from elsewhere, but they can't always renegotiate the old rates. Thus they end up with possibly losing the deposits.
- oaw-bct-ar-bamf 4y ago
  Why would it collapse? Nobody is able to afford to buy/live in your property anymore. If you don‘t find buyers/renters how will you manage to pay off your investment credit you took out at 95%credit rate while only covering contract signing fees at ~1% interest with 10year stable interest. Once interest is adjusted after 10years to 4-5% you (property owner that can’t find any high paying renters) are fucked
  - konschubert 4y ago
    Some people are able to, otherwise it would have collapsed already. There just isn’t enough supply
  - nemo44x 4y ago
    In the USA your interest rate is fixed for the term of the mortgage. There are exceptions but they are comparably extremely rare. I think you have a good point though regarding places that reset interest every n-years. People will struggle to make payments. It will be interesting to see what happens in places like Canada. I’m guessing millions more people on the governments teet. I assume the current admin wound love that.
ars 4y ago
What does "fold" even mean? Real estate prices are not being artificially elevated, they are a simple function of supply and demand. Just build more houses and prices will do down, and they'll go down slowly, without collapsing. The typical model works like this: The suburbs around a city grow, the city runs out of space. This causes land in the suburbs to become expensive, so they subdivide lots and build more houses. The suburbs now become the city. And people move to the edge of the city and create new suburbs, and the city grows. Of course if you read the propaganda suburbs are evil, but in the real world, they are simply a place where the city will eventually grow to. Maybe that's the problem? People are actually buying in to the propaganda and not building suburbs, and this breaks the entire model?
- hkt 4y ago
  > Real estate prices are not being artificially elevated Alas, they are. Supply and demand for housing is measured in units of currency, not people. Ask yourself, how many multiples of income can you borrow, with what kind of deposit? The ratio has shrunk over time, allowing roughly the same people to borrow steadily increasing amounts of money. What's worse is that (in some countries at least) common measures of inflation don't measure house prices. The UK is an example of this. I'm unqualified to tell for sure, but I suspect some central banks have seen house prices as a way of keeping down measured inflation. The solution (IMO) is a policy of relative decline - look to make house prices rise more slowly than wages for a generation.
  - sokoloff 4y ago
    The US does not include house purchase prices (the one-time capital cost), but does include actual rent or owner equivalent-rent (the ongoing/operating cost) in its measures of inflation. This is entirely sensible consistent treatment, but often inadvertently or intentionally misunderstood.
- swexbe 4y ago
  No, the problem is that suburbs are the only thing we build anymore. Fresno has doubled it’s population since 1940 while 10x increasing it’s land usage.
lalaland1125 4y ago
> everyone is milking the 90s-20s real estate bubble Look at the market statistics. It's not a bubble at all. Demand is legitimately very high and supply is very low (just look at the very low vacancy statistics). We have banned the construction of most new housing and this is the natural result.
- Haga 4y ago
  [dead]

nemo44x 4y ago

Why would it collapse? There’s insatiable demand for extreme limited property. Interest rate hikes may lower the price of property but the interest will rise proportionately. Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.

kshacker 4y ago
You can twist the supply demand imbalance only so much. Go farther than required for longer than required, and some cracks will eventually show up. Like they did for Silicon Valley bank. So it is hard to say when those cracks appear since the global market is quite a big market and can sustain imbalances for a long time, but then the bigger the bubble the bigger the crash. Foreigner limits, tax on no. Residents, start of uncontrolled construction - these are only some ways I can think it may break and my ideas are based only on reading the internet, you never know what dynamics come and break the housing. Or they break the world or its money supply. Not trying to fear monger just saying the dance will end.
- kfarr 4y ago
  I think the difference here is fundamentally there is insufficient supply for the demand of housing globally, or at least US, UK and EU. The previous generation made new builds extremely difficult or impossible in many jurisdictions.
  - ClumsyPilot 4y ago
    There is financial fuckerage driving prices far beyond what normal dynamics would allow.
  - baseline-shift 4y ago
    Yes, insane zoning limits in cities in the US since the 60s have indeed made it impossible to build near jobs. But there's abandoned medieval villages (no plumbing or electricity so far...) in hilly rural Italy.
    - rickydroll 4y ago
      zoning would not matter to my commute length unless I moved every time I changed jobs and had no dogs or human partners. I have made 30 years of compromises because of partners and pets. I've stayed at shitty jobs because good ones were too far away and I could not move. building near jobs is either building company towns or embedding classism and environmental injustice into property. would you live next door to a small nuke power plant because it was colocated with your office job? how about a refinery? a bsl3 lab? sewer treatment? or would you force those workers to live near their work and put them and all the dirty parts of civilization far away from the upper class clean places?
      - Roritharr 4y ago
        I live next to a coal power plant. It's a tradeoff between my ability to pay the rent for a single family home with a garden and living close to a large city in Germany that gives our family the chance of job and education variety. Is it a good deal? Ask me in twenty years.
    - riffraff 4y ago
      > But there's abandoned medieval villages (no plumbing or electricity so far...) in hilly rural Italy. there's small towns with fine electricity and plumbing in rural Italy but they are de-populating anyway, cause most people want to live in/nearby cities as that is where money and opportunity generally is. The same everywhere I think (bar few cases like the Netherlands which are basically a single sprawl). Hungary just published their most recent census, and all of the country has depopulated in the last ten years except for Budapest. The big hope is that the trend will reverse with more remote-ization, but it's, well, a hope.
- canadianfella 4y ago
  [dead]
ianai 4y ago
Eventually death, disease, or divorce will force properties to sell. That will move market values down. Meanwhile, my buddy’s mobile home manufacturer is back to being able to output a home in weeks. Construction has already fallen off a cliff-which makes sense given that’s the easiest to spin up/down of the market. The RE market is responding to the rates. Though, whether it’ll be enough is beyond my knowledge or possibly anyone else’s. If not, it’s precisely this sort of situation where change seems impossible that people can find the will to insist upon change. For renters, I suspect regulation and oversight would go a long way. It’s not going to create a NYC level inefficiency if gobbling up SFHs for rental properties is curtailed. (And I’ve heard of at least one story suggesting AirBnB rentals may be unable to rent at current prices/supply.) Nor would outlawing problematic practices create problems. In the west, people largely have a say in their governments. People just need to show up to elections and primaries with the demand that government work for them.
- shagie 4y ago
  That assumes that the entities buying the housing are subject to death, disease, and divorce. From 2022: Investors bought a record share of homes in 2021. See where. - https://wapo.st/3ZDSZqm https://wapo.st/3ZDSZqm Strong Towns from 2022: Corporate Investors Own Nearly Half of This City's Residential Property - https://www.strongtowns.org/journal/2022/5/25/corporate-investors-own-nearly-half-of-this-citys-residential-property https://www.strongtowns.org/journal/2022/5/25/corporate-inve...
  - nebula8804 4y ago
    Damn, I did not expect that city to be Newark.
    - quags 4y ago
      When I went to Newark 20 years ago the road I was on looked like an abandoned waste land. Today the area has multi level family houses and looks more like a walkable area. Ascetically it looks much better - if it’s really a better place to live I don’t know. It’s likely it needed massive investor cash to rebuild so I’m honestly not surprised.
baseline-shift 4y ago
In Japan, there are empty houses going cheap as old people die off. In a few decades, possibly there will be some effect as the de-population bomb from lowered birthrates globally begin to affect real estate prices. Let's hope.
- nemo44x 4y ago
  Japan is unique for a few reasons: 1) Very insulated culture with nearly no immigration coupled with low birth rates. 2) They build houses very differently. They aren't generally made to last centuries if taken care of and renovated. The strategy is to build small units cheaply and tare down after 2- years. It's like Ikea for homes. 3) I agree, depopulation is a problem. We really need to incentivize middle and upper middle class people to have large families.
  - rickydroll 4y ago
    item 3 is solving the wrong problem. people will have babies when they have space and feel like they can give their kids a better future. trying to move people into dense urban living it the opposite of space needed for kids. right now, we cannot give kids a better future in the current billionaire run world. we need to depopulate the billionaires and with the freed up wealth, fix the environmental problems so we have a chance at a future.
    - IG_Semmelweiss 4y ago
      Do.you have kids? "Having space and feeling like they can give them a better future" is about 1 thing. Money If you eliminated any of income taxes, or a combination of SS + reducing deficit spending (inflation), or the % of income going to heakthcare by eliminating its employee and employee subsidies (Medicares), there would be a populatiom boom. All you need to do is free people from having to make money, to meet basic needs. And people Will have children again. Instead, we have a social policy that everyone just needs to work in order to pay for the sins (and pleasure) of their previous generation. Yes. Those Caribbean cruises , FL homes & racetrack bets, are paid by the empty silence of hospital newborn wards across the country.
csomar 4y ago
If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming. And housing is expensive by design and not by constraint. I'm staying in KL, a comparatively cheap place by Western standards. The housing market is crap here from a seller perspective as you have an over-supply of condos. That, despite the large amount of foreigners living here. You can fix Western supply issue by allowing high-density condos nearby cities. Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses.
- icelancer 4y ago
  > Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses. The people most vocally opposed to these buildings (which I support) in the United States are liberals/progressives who say those types of living situations are unacceptable, and hold out for the magic beans of large apartments/houses at well-below market prices. Unsurprisingly, this only makes prices go up.
  - neerd 4y ago
    [Citation needed]
- f6v 4y ago
  > If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming. First off, what are they going to do? It’s the same in most big cities(1 million+). Second, those working remotely can always move from Munich to Leipzig (where OP can rent 3bd for the price of his Munich studio). I don’t see society collapse happening. Just need a bit of population redistribution.
- jjav 4y ago
mo_42 4y ago
> Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen. Well, the economic landscape can change drastically. Compared to other assets real estate has quite some costs. With all the environmental regulations, for example, the EU is planning, real estate might be much less lucrative. For individual landlords, it might be even impossible as they don’t have any money for investment. I’m not dismissing your point. Just adding some balance.
wizofaus 4y ago
It's not implausible that changes in technology and life/work habits will ultimately make currently highly-attractive areas less so. And once population starts to fall in combination with minimal wage growth it's hard to see what would sustain current high prices. Ultimately it seems the primary driver behind property prices is the willingness of buyers to take on debt and for banks to issue it. If house prices did start to plateau/drop off over a sustained period with no obvious indicators of future growth then that willingness (particularly on behalf of banks) may well drop off pretty quickly too.
plufz 4y ago
I don’t know about your country. But in mine prices of property has not followed population growth, increased income or really anything that would make this growth sustainable. It has been a product of central banks setting way too low interest rates (and to a part lacking regulations).
- nemo44x 4y ago
  Interest rates don’t really matter as much as you might think. Yes as rates go down the price a house sells for goes up. But the monthly payment stats the same as that’s how people buy houses. They figure out what they can spend easy month in principal, interest, and taxes and then shop and bid in the places they want to live, which almost always aligns with how much they can spend. Rising interest rates are good for cash buyers and banks.
  - Ekaros 4y ago
    Are actually rising rates good for banks? Didn't SVB fail due to rising rates? And the other banks might also have issues. They got deposits. They lend out money, but they locked the loans to certain rate. Now the depositors can get better offers from elsewhere, but they can't always renegotiate the old rates. Thus they end up with possibly losing the deposits.
oaw-bct-ar-bamf 4y ago
Why would it collapse? Nobody is able to afford to buy/live in your property anymore. If you don‘t find buyers/renters how will you manage to pay off your investment credit you took out at 95%credit rate while only covering contract signing fees at ~1% interest with 10year stable interest. Once interest is adjusted after 10years to 4-5% you (property owner that can’t find any high paying renters) are fucked
- konschubert 4y ago
  Some people are able to, otherwise it would have collapsed already. There just isn’t enough supply
- nemo44x 4y ago
  In the USA your interest rate is fixed for the term of the mortgage. There are exceptions but they are comparably extremely rare. I think you have a good point though regarding places that reset interest every n-years. People will struggle to make payments. It will be interesting to see what happens in places like Canada. I’m guessing millions more people on the governments teet. I assume the current admin wound love that.

ars 4y ago

What does "fold" even mean? Real estate prices are not being artificially elevated, they are a simple function of supply and demand. Just build more houses and prices will do down, and they'll go down slowly, without collapsing. The typical model works like this: The suburbs around a city grow, the city runs out of space. This causes land in the suburbs to become expensive, so they subdivide lots and build more houses. The suburbs now become the city. And people move to the edge of the city and create new suburbs, and the city grows. Of course if you read the propaganda suburbs are evil, but in the real world, they are simply a place where the city will eventually grow to. Maybe that's the problem? People are actually buying in to the propaganda and not building suburbs, and this breaks the entire model?

hkt 4y ago
> Real estate prices are not being artificially elevated Alas, they are. Supply and demand for housing is measured in units of currency, not people. Ask yourself, how many multiples of income can you borrow, with what kind of deposit? The ratio has shrunk over time, allowing roughly the same people to borrow steadily increasing amounts of money. What's worse is that (in some countries at least) common measures of inflation don't measure house prices. The UK is an example of this. I'm unqualified to tell for sure, but I suspect some central banks have seen house prices as a way of keeping down measured inflation. The solution (IMO) is a policy of relative decline - look to make house prices rise more slowly than wages for a generation.
- sokoloff 4y ago
  The US does not include house purchase prices (the one-time capital cost), but does include actual rent or owner equivalent-rent (the ongoing/operating cost) in its measures of inflation. This is entirely sensible consistent treatment, but often inadvertently or intentionally misunderstood.
swexbe 4y ago
No, the problem is that suburbs are the only thing we build anymore. Fresno has doubled it’s population since 1940 while 10x increasing it’s land usage.

lalaland1125 4y ago

> everyone is milking the 90s-20s real estate bubble Look at the market statistics. It's not a bubble at all. Demand is legitimately very high and supply is very low (just look at the very low vacancy statistics). We have banned the construction of most new housing and this is the natural result.

Haga 4y ago
[dead]