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I don't think I understand why not ... Presumably there has been a lot of immigration to the Netherlands in the same time. Naturally building needs to keep pac

by tome 2y ago

I don't think I understand why not ... Presumably there has been a lot of immigration to the Netherlands in the same time. Naturally building needs to keep pace with immigration, so (300k + net migration) homes sounds like it should resolve the problem. If not, why not?

Etheryte 2y ago
There are two key points you might be missing here. One is affordability. Landlords buying up housing to let pushes the prices up for everyone. In the Netherlands this has reached a point where two people living together and both earning the national median wage cannot get a mortgage for an average price home because they don't meet the minimum income requirement. This in turn means they're effectively forced to rent, barring outside intervention such as social housing programs etc, which creates more cash flows to landlords. The other issue is time. Building new housing takes time and even though new housing enters the market, companies and landlords with large portfolios have ample time to build up capital to buy it. They can afford to bid considerably more than starters who are buying their first home. To maybe exemplify what I mean, the last time I rented a home in the Netherlands, my landlord was a family estate that owned hundreds of apartments. At Dutch prices this means they can afford to put in a down payment for a mortgage for a number of newly built homes every single month, and they aren't even a big player in the local housing market.
- tome 2y ago
  Thanks, I take the point that housing is expensive and two people pooling their median wage can't afford an average price home, and in the meantime they're paying rent to landlords. I also take the point that whilst paying rent to landlords, those landlords are increasing their wealth and this contributes to them being able to buy more homes. What I don't get is how you can conclude: > If any freshly built housing is bought up by landlords who can afford to outbid ordinary people, then adding supply doesn't alleviate the problem. Assuming house building is economically viable (and if it's not all bets are off anyway) then isn't it equally plausible that building masses of housing means that 1. There will be simply too many new houses for landlords to buy them anyway. Their capital isn't unlimited! And, 2. House prices will drop, forcing landlords who are holding housing for the appreciation will exist the market, further putting prices down.

by tome 2y ago

Etheryte 2y ago

There are two key points you might be missing here. One is affordability. Landlords buying up housing to let pushes the prices up for everyone. In the Netherlands this has reached a point where two people living together and both earning the national median wage cannot get a mortgage for an average price home because they don't meet the minimum income requirement. This in turn means they're effectively forced to rent, barring outside intervention such as social housing programs etc, which creates more cash flows to landlords. The other issue is time. Building new housing takes time and even though new housing enters the market, companies and landlords with large portfolios have ample time to build up capital to buy it. They can afford to bid considerably more than starters who are buying their first home. To maybe exemplify what I mean, the last time I rented a home in the Netherlands, my landlord was a family estate that owned hundreds of apartments. At Dutch prices this means they can afford to put in a down payment for a mortgage for a number of newly built homes every single month, and they aren't even a big player in the local housing market.

tome 2y ago
Thanks, I take the point that housing is expensive and two people pooling their median wage can't afford an average price home, and in the meantime they're paying rent to landlords. I also take the point that whilst paying rent to landlords, those landlords are increasing their wealth and this contributes to them being able to buy more homes. What I don't get is how you can conclude: > If any freshly built housing is bought up by landlords who can afford to outbid ordinary people, then adding supply doesn't alleviate the problem. Assuming house building is economically viable (and if it's not all bets are off anyway) then isn't it equally plausible that building masses of housing means that 1. There will be simply too many new houses for landlords to buy them anyway. Their capital isn't unlimited! And, 2. House prices will drop, forcing landlords who are holding housing for the appreciation will exist the market, further putting prices down.