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No, I got it. I just think that would mainly mean investors exit the market. If it is less profitable, they either further raise the prices or they get out of
by harperlee 2y ago
No, I got it. I just think that would mainly mean investors exit the market.
If it is less profitable, they either further raise the prices or they get out of the market; the ratio of those two options depends on price elasticity. And prices don't have a lot of room to grow further in my opinion... unless of course the wages grow quickly (and minimum wage indeed has done it in the last 5 years). But then the country needs to be more productive or people get poor (fired!), which is also not good for the renting business, etc.
At the end of the day you're betting on the spanish market either squeezing people further, or gaining productivity real quick. And real estate is not very liquid, yet is typically long-term, and those investors are risk averse. So... there will be some that will exit the market.
- Manuel_D 2y agoAnd what happens when people leave the rental market? Fewer apartments for rent. And what happens to rental prices when there's a scarcity of apartments to rent? Prices go up.
- peter335 2y agoYes, exactly. This is what I was getting at!
- harperlee 2y agoWell, no one can pack the apartment and leave the country. At worst they are left unoccupied, but that's a lot of money to have it parked, and can be discouraged with taxes; so alternatively people sell them... so buy and rent eventually go down.
- Manuel_D 2y agoAnd what will the buyers do with the apartments? Rent them? Well, then they'll either have to spend money on security or price the risk of okupas into the rent. In either case rent goes up. This is as nonsensical as the proposals in San Francisco to prohibit the construction of apartments to try and reduce rent. Dissuading people from renting out apartments reduces the supply apartments. There is zero possibility this results in better rental prices.
- zrn900 2y ago> And what will the buyers do with the apartments? Rent them? Yes. > This is as nonsensical as the proposals Its not nonsensical. Its what is happening. Use it or lose it. Works. Find a good tenant, rent it for decades - like how it is supposed to be.
- Manuel_D 2y agoAgain, the comment you responded to explains how this makes it more risky and less profitable to rent out apartments. It's dissuading people from renting: > you're also making it more risky and thus less profitable to buy and rent out apartments When something becomes riskier, fewer people do it unless there's some other incentive. A vacancy tax could incentivize renting, buy enabling squatters does nothing but making rentals more risky. The only thing that can solve a shortage is increased supply or reduced demand. The latter is not feasible since people need housing. The former requires that land owners take the risk on renting out apartments, and anything that increases the risk means less people will do it. > Find a good tenant That's easier said than done. The better way to convince prospective renters to rent out their property is to make it easier to kick out bad tenants. If evictions are backlogged, then a landlord risks being stuck with a non paying tenant for a long time.
- zrn900 2y ago> No, I got it. I just think that would mainly mean investors exit the market. Great. They should get the hell out asap.