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Or is the main factor foreign investors treating residential property as an investment, rather than somewhere to live in?
by Angostura 2y ago
Or is the main factor foreign investors treating residential property as an investment, rather than somewhere to live in?
- ben_w 2y agoForeign investment requires either the property can be resold later for more, or let out for the duration. The former is a bubble that eventually collapses, the latter still has people living in those properties for whatever the market rates are.
- Nextgrid 2y ago> The former is a bubble that eventually collapses The market can remain irrational longer than you can remain solvent. There's lots of incentives from everyone involved (all the way up to the government itself) to ensure this bubble never collapses, bending the rules and everything else around it if necessary - not too dissimilar to how the speed of light remains a static constant regardless of an observer's own speed, with space and time adjusting around them as needed to ensure this.
- ben_w 2y ago> The market can remain irrational longer than you can remain solvent. Indeed. But: > There's lots of incentives from everyone involved (all the way up to the government itself) to ensure this bubble never collapses, bending the rules and everything else around it if necessary The more this happens, the harder the resulting crash. The same argument as the Laffer curve for taxes, but for rent: when it gets to 100% of income, there's no incentive to bother immigrating, and all the reason to emigrate.
- HPsquared 2y agoIn a normal functioning market, foreign investment would mean more houses getting built.