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People really want there to be "one reason" for skyrocketing housing prices. Real life is not so accommodating. The problem is multi-faceted. Is there asset p

People really want there to be "one reason" for skyrocketing housing prices. Real life is not so accommodating. The problem is multi-faceted. Is there asset price inflation due to cheap money? Yes. Have foreign nationals been parking their cash in real estate in certain western countries? Yes. Has restrictive zoning and NIMBY-ism reduced the incoming supply of new homes? Yes. Multiple things can be true at the same time, all contributing to the current state of affairs.

ethbr1 2y ago
Exactly! And important to recognize the interest groups behind preventing progress on each. Fixing the issue has been stymied for too long by each pointing at the others and saying "They're the real problem!" to justify inaction / rolling back fixes on their pet interest. All need to be addressed.
- ffsm8 2y ago
  These aren't all issues though. Another contributing factor is that home/lands ownership can be inherited. That's going to be the biggest contributer as time goes on (not right now though), as eventually all desired land will have been bought by what amounts to an oligarchy. Honestly, land/homes should never be inheritable, and companies should never be able to own land altogether. Not that this would ever happen. The status quo is too profitable for the land/home owners.
  - eszed 2y ago
    >land/homes should never be inheritable Eh, nah. But, there should be inheritance taxes set at a level which prevents the formation of a "landed gentry". Unfortunately, the issue has been demogogued to the point that middle-class people (who won't have anywhere near the assets to be taxed, as in not by an order of magnitude) treat the idea as anathema.
    - AnimalMuppet 2y ago
      "Bracket creep". The middle class is afraid of taxes that are "for the rich" being extended to tax them. And not without some reason - income tax was sold as "only for the rich".
      - ethbr1 2y ago
        The easiest way for the rich to decrease taxes has been to extend them to the middle class and then push for tax cuts.
  - AnimalMuppet 2y ago
    Where do you get this "should"? What moral basis do you use for saying that it "should" be this way?
setgree 2y ago
Multi-faceted and interrelated: a lot of housing would become a less attractive investment vehicle if near-substitutes were more plentiful. An overseas investor buying a Vancouver condo assumes that the asset will have high resale value (in addition to its use value as, e.g., a rental or airbnb). But in a saner world, housing would depreciate in value over time in proportion to its use and maintenance, like other durable goods.
- throwaway1105q 2y ago
  That would make sense in a world where the surrounding location is completely static, but generally as a town/city grows it's much more desirable - more work for better wages, more business opportunities, economies of scale, better education... A world that doesn't respond to that with increasing price doesn't seem sane. Imagine that you start with a house in the middle of nothing. 20 years later there is a major city around you - and the house should be cheaper than it was when there was nothing? What about new housing around your house, should it have the same nearly zero price too? What even is depreciation in case of housing - my grandmother lives in a 120 year old house and I'm pretty sure my grandchildren will live there too.
  - freedrock87 2y ago
    Maintaining houses cost time (aka money) and money.
    - throwaway1105q 2y ago
      Not so much it'd be visible in the price - maybe 5-10% up or down, more pronounced in remote locations. The location is the important factor. Realtors work with square area pricing set for entire towns or municipalities.
      - trashtester 2y ago
        That REALLY depends on the type of housing, not only on location. And it also depends on the interest rate relative to inflation. In fact, it's really similar to dividends on stocks, just with cost instead of profit. For a house in a suburb or rural area, maintenance (enough to keep the house in the same condition you bought it in) can easily cost as much per year (on average) as the cost-of-money (interest rate - inflation) for the debt. And in some case much more than that. If one such house is twice as expensive to maintain (over time) due to differences in building materials, environmental conditions, size/geometrical factors, etc, the cost of owning the house over a time period may easily be 25-50% higher for the most expensive compared to the least expensive if we assume the same purchase price.
cced 2y ago
Right, but when you’re driving 100km/h down the road, hitting a moose will slow you down a whole lot more than a bird. Is there any discussion in the scaling/proportion of a given facet when these get brought up?
joe_the_user 2y ago
Uh, it's not strange at all to expect a single cause when a system fails. Rather, there's often a chain of failure but with one thing at the head. You can look at how a car breaks down - you go from a single belt failing to a damage spread around. Your list can be easily sorted this way (Notably, foreign nationals with money are just an instance of asset price inflation, in no way an instance of "nuance" or something). I see the chain of causation thus - a flood of printed money has increased the value of all capital assets (some of that money appears as the money of foreigners and some of domestic investors, some as hedge funds, etc). Housing has been a focus and areas with restricted supply are where the money has been most attracted (it's spread more and more as the scale increases - a key point of the gp).
selfmodruntime 2y ago
You conveniently forgot immigration. Canada alone has added 500.000 people to their populace since the beginning of the year.
- 7bit 2y ago
  Immigration Numbers alone are Wörth nothing. How many people emigrated. How many people died? Tell me how the Population Numbers chnaged per years instead If Just looking at Immigration.
  - diordiderot 2y ago
    Just shy of 1% of people die each year (~389,000 people) but the birth rate is just over 1%. That means all immigration counts towards the pop increase
  - selfmodruntime 2y ago
    > How many people died? Well since Canada only has a slightly declining natural population rate, not many in comparison to births? They added 500.000 people to their populace since the beginning of the year. The births are on top of that. It‘s not true that immigration numbers are worth nothing. Immigration happens mostly in densely populated areas, thereby further increasing home prices.
    - 7bit 2y ago
      > It‘s not true that immigration numbers are worth nothing. Conveniently replying to something I never said. Clever.
      - selfmodruntime 2y ago
        You‘re right. My point still stands.

ethbr1 2y ago

Exactly! And important to recognize the interest groups behind preventing progress on each. Fixing the issue has been stymied for too long by each pointing at the others and saying "They're the real problem!" to justify inaction / rolling back fixes on their pet interest. All need to be addressed.

ffsm8 2y ago
These aren't all issues though. Another contributing factor is that home/lands ownership can be inherited. That's going to be the biggest contributer as time goes on (not right now though), as eventually all desired land will have been bought by what amounts to an oligarchy. Honestly, land/homes should never be inheritable, and companies should never be able to own land altogether. Not that this would ever happen. The status quo is too profitable for the land/home owners.
- eszed 2y ago
  >land/homes should never be inheritable Eh, nah. But, there should be inheritance taxes set at a level which prevents the formation of a "landed gentry". Unfortunately, the issue has been demogogued to the point that middle-class people (who won't have anywhere near the assets to be taxed, as in not by an order of magnitude) treat the idea as anathema.
  - AnimalMuppet 2y ago
    "Bracket creep". The middle class is afraid of taxes that are "for the rich" being extended to tax them. And not without some reason - income tax was sold as "only for the rich".
    - ethbr1 2y ago
      The easiest way for the rich to decrease taxes has been to extend them to the middle class and then push for tax cuts.
- AnimalMuppet 2y ago
  Where do you get this "should"? What moral basis do you use for saying that it "should" be this way?

setgree 2y ago

Multi-faceted and interrelated: a lot of housing would become a less attractive investment vehicle if near-substitutes were more plentiful. An overseas investor buying a Vancouver condo assumes that the asset will have high resale value (in addition to its use value as, e.g., a rental or airbnb). But in a saner world, housing would depreciate in value over time in proportion to its use and maintenance, like other durable goods.

throwaway1105q 2y ago
That would make sense in a world where the surrounding location is completely static, but generally as a town/city grows it's much more desirable - more work for better wages, more business opportunities, economies of scale, better education... A world that doesn't respond to that with increasing price doesn't seem sane. Imagine that you start with a house in the middle of nothing. 20 years later there is a major city around you - and the house should be cheaper than it was when there was nothing? What about new housing around your house, should it have the same nearly zero price too? What even is depreciation in case of housing - my grandmother lives in a 120 year old house and I'm pretty sure my grandchildren will live there too.
- freedrock87 2y ago
  Maintaining houses cost time (aka money) and money.
  - throwaway1105q 2y ago
    Not so much it'd be visible in the price - maybe 5-10% up or down, more pronounced in remote locations. The location is the important factor. Realtors work with square area pricing set for entire towns or municipalities.
    - trashtester 2y ago
      That REALLY depends on the type of housing, not only on location. And it also depends on the interest rate relative to inflation. In fact, it's really similar to dividends on stocks, just with cost instead of profit. For a house in a suburb or rural area, maintenance (enough to keep the house in the same condition you bought it in) can easily cost as much per year (on average) as the cost-of-money (interest rate - inflation) for the debt. And in some case much more than that. If one such house is twice as expensive to maintain (over time) due to differences in building materials, environmental conditions, size/geometrical factors, etc, the cost of owning the house over a time period may easily be 25-50% higher for the most expensive compared to the least expensive if we assume the same purchase price.

cced 2y ago

Right, but when you’re driving 100km/h down the road, hitting a moose will slow you down a whole lot more than a bird. Is there any discussion in the scaling/proportion of a given facet when these get brought up?

joe_the_user 2y ago

Uh, it's not strange at all to expect a single cause when a system fails. Rather, there's often a chain of failure but with one thing at the head. You can look at how a car breaks down - you go from a single belt failing to a damage spread around. Your list can be easily sorted this way (Notably, foreign nationals with money are just an instance of asset price inflation, in no way an instance of "nuance" or something). I see the chain of causation thus - a flood of printed money has increased the value of all capital assets (some of that money appears as the money of foreigners and some of domestic investors, some as hedge funds, etc). Housing has been a focus and areas with restricted supply are where the money has been most attracted (it's spread more and more as the scale increases - a key point of the gp).

selfmodruntime 2y ago

You conveniently forgot immigration. Canada alone has added 500.000 people to their populace since the beginning of the year.

7bit 2y ago
Immigration Numbers alone are Wörth nothing. How many people emigrated. How many people died? Tell me how the Population Numbers chnaged per years instead If Just looking at Immigration.
- diordiderot 2y ago
  Just shy of 1% of people die each year (~389,000 people) but the birth rate is just over 1%. That means all immigration counts towards the pop increase
- selfmodruntime 2y ago
  > How many people died? Well since Canada only has a slightly declining natural population rate, not many in comparison to births? They added 500.000 people to their populace since the beginning of the year. The births are on top of that. It‘s not true that immigration numbers are worth nothing. Immigration happens mostly in densely populated areas, thereby further increasing home prices.
  - 7bit 2y ago
    > It‘s not true that immigration numbers are worth nothing. Conveniently replying to something I never said. Clever.
    - selfmodruntime 2y ago
      You‘re right. My point still stands.