by user20180120 on 5/27/24, 1:39 PM with 1245 comments
by tmnvix on 5/27/24, 8:38 PM
Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause?
In my view this is symptomatic of a more fundamental issue - global asset price inflation driven by a broken financial system (i.e. a system being artificially pumped up with cheap credit). Housing is just where the rubber hits the road and regular lives are directly effected. Just look at the tight correlation between the increase in the money supply and property prices.
For those who insist that the number of properties is inadequate, take a look at the numbers for each of the countries I mentioned in the first chart here: https://www.oecd.org/els/family/HM1-1-Housing-stock-and-cons... (Total number of dwellings per thousand inhabitants, 2022 and 2011).
This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence.
Cheap credit causes an increase in demand. This is not demand for homes but additional 'artificial' demand for properties as investments. Think short term rentals, second homes, land banked properties, etc. By definition, only investment properties can be underutilised - owner occupied homes are occupied! So in an environment that encourages property investment you will see more underutilisation.
What will cause prices to fall is higher interest rates. This is what has been happening in NZ.
by speeder on 5/27/24, 2:32 PM
1. There are a ridiculous amount of abandoned properties, when I walk the streets of major cities, sometimes more than half of the buildings even in expensive areas are boarded-up.
2. Meanwhile I am afraid of being homeless soon, I lost my job recently, and the unemployment benefit I can receive is literally half of my rent. Thing is, there is no "worse but cheaper" place to move to. I already live in a "0" apartment, with the "0" referring to the number of rooms. The apartment is literally just an empty square with kitchen sink and bathroom stuff. I don't even have my workstation anymore because literally there is no physical place for it inside the apartment.
People are like: "Build more homes". Yet the amount of abandoned properties (by the way, this also include abandoned farmland! Government is upset that there are tons of that, and the result is land with zero management, with wildfires, poachers, drug traffickers...) is greater than the number of families needing.
by robertlagrant on 5/27/24, 9:18 PM
- built 254000 homes[0]
- had 745,000 people immigrate (net)[1]
- had 600000 people turn 21[2]
- had 577160 people die[3]
If you gain a load of people, far more than you increased dwellings for, prices will go up and dwelling size will go down. It's not particularly complicated.
[0] https://www.savills.co.uk/research_articles/229130/357082-0
[1] https://www.bbc.co.uk/news/uk-politics-67612106
[2] https://www.ons.gov.uk/peoplepopulationandcommunity/birthsde...
[3] https://www.ons.gov.uk/peoplepopulationandcommunity/birthsde...
by DGAP on 5/27/24, 7:33 PM
by bdcravens on 5/27/24, 12:13 PM
If you told me 10 years ago how much I paid for it, I'd ask what the name of my butler is.
by DrNosferatu on 5/27/24, 1:17 PM
- Cities across the world built thorough sewage systems, preventing the need for private citizens to empty their litter buckets out the window – a large river in Chicago was even reversed!
- Cities across the world built mass transit networks, enabling citizens to move around efficiently without relying solely on private vehicles.
- Cities across the world should build affordable housing networks, as Vienna did. This way, citizens don't have to fall victim to the exploitation of speculators and distortions of the supposedly fair market.
Public affordable housing is a necessary infrastructure, just like sewers and transit, to create livable cities for all residents.
by JonChesterfield on 5/27/24, 12:30 PM
I think this probably has decreased house prices to some extent, but people are really insanely reluctant to sell a house for less than they bought it for so lots will wait for years before accepting the change.
It's probably good times to be buying an ex-rental to live in and getting better as mortgage rates fall.
by imperfect_light on 5/27/24, 8:45 PM
But taking a more long-term view, in the US the owner-occupied housing rate about 65%, which has not changed a ton in the last 50-60 years (high was 69% in 2005 and low was 63% in 1965). Granted the market has changed a lot, we have much bigger houses, and more two-income families to pay for those more expensive houses.
https://www.advisorperspectives.com/dshort/updates/2024/04/3....
by roenxi on 5/27/24, 12:36 PM
I'd personally bet that there is a gentle imbalance appearing between how much energy the average person can lay claim to vs. how much they need to build and service a house and this is a symptom of the energy squeeze. But it might not be and this article isn't doing much to prove or disprove what the actual problems are because we need more information to make useful observations.
by esel2k on 5/27/24, 3:41 PM
Why not apply the following: - every house not used for primary living place is highly taxed (removing all speculative ownership) - charge foreign investors heavily (australia will do this soon) - tax reduction for renting places for lower than median per square meter price - incentivising affordable homes
Just trying to understand why this wouldn’t work?
by vladms on 5/27/24, 10:07 PM
I grew up in a 20 square meter per person apartment (with multiple person living there, for a total size of 60 square meters) - and it was definitely not pleasant. But I feel that nowadays people also expect a lot - for example in The Netherlands the reported average of 65 square meter per person https://longreads.cbs.nl/trends19-eng/economy/figures/constr....
Not discussing what it should be ideal, but if (some) people now want 2x or 3x what they wanted 40 years ago for example (without actually needing it due to a larger family), it's no wonder that there are issues (with prices/availability etc.).
by fairity on 5/27/24, 8:03 PM
by EduardoBautista on 5/27/24, 2:38 PM
My only thought is that it's political, and some voters don't want their houses to lose value.
by rybosworld on 5/28/24, 3:02 PM
The most major busts by year:
1837 - caused by land speculation, driven by the gold rush
1873 - caused by land speculation, driven by railroad companies and their investors
1929 - caused by a stock market bubble
2008 - caused by widespread mortgage fraud and speculation on the housing market
by vouaobrasil on 5/27/24, 11:56 AM
by nomilk on 5/27/24, 2:34 PM
Otherwise it doesn't make sense that prices are high for a good (housing) whose primary input (land) is in great supply.
by MainlyMortal on 5/27/24, 10:11 PM
I was born in, grew up in and currently live in a location that the HN community never even thinks about. Most people in here have no idea of how the regular 99% live and then base their whole world view on expensive capital cities and hold the strangest views of housing.
I bought my current house in the 2010s, my mortgage is still half the price of renting and I could manage to pay for everything by myself even if I were on a minimum wage. The problem isn't anything to do with housing it's to do with your own warped view on the world.
I don't say this to be contrarian or to necessarily make a point. I want you to look up the minimum wage of your country and think about how literally everyone else happily lives without thinking twice about these things. You all live a massively privileged life yet these things concern you more than they should.
by jeffbee on 5/27/24, 2:09 PM
by pif on 5/28/24, 2:10 PM
Housing prices are unaffordable in big cities, while abandoned properties are rotting in the countryside everywhere. It's time we start spreading the economy rather than concentrating the people.
by adverbly on 5/27/24, 9:27 PM
by apwell23 on 5/28/24, 2:30 PM
all housing posts have the following discussions 1. housing shouldn't be an investment
2. 'local democracy' always turns into nimby
3. something about gentrification
4. something about govt incentives/disincentives: don't give tax breaks for homeowners, tax second home ownership ect .
5. something about airbnb
6. some comparisons with europe/denmark
pls let me know if i need to add anything to list
by dcchambers on 5/28/24, 4:41 AM
Most of our friends are still running along the platform, desperately trying to grab on but the train just keeps accelerating.
Our first home price increased by 50% in 4 years when we sold and moved into a bigger home in 2022, and we hardly did anything to it. Just the way the market is. The only reason we were able to afford the new house is because of the rapid gains on our first house and the fact that we had a ~2% interest rate for two years that allowed us to quickly build up a savings nest egg, with a mortgage payment that was far below what our friends paid in rent.
I just feel bad for all my fellow millennials that couldn't catch the train before the market went fucking insane in 2020. Because it really does feel like catching up is impossible if you aren't already in the game.
by andrewstuart on 5/27/24, 12:09 PM
And politicians love every dollar of price increase.
There’s the homeowners and the renters/serfs and nothing in between.
Dead society, nothing to aim for or live for.
by dhx on 5/27/24, 3:29 PM
- Increasing density in older cities requires infrastructure upgrades that are much more complex and expensive to retrofit than it was to plan and build the first time when space was abundant.
- Multi-story buildings are more expensive per floor space area than single-story buildings. As cities become denser, the added expense of multi-story buildings is realised.
- Home standards have dramatically increased. We've forgotten how common it used to be for houses to leak during storms, or how hot or cold houses used to be without any insulation or HVAC systems. We've forgotten flash floods caused by inadequate stormwater systems. Where children used to grow up in bunk beds in tiny shared bedrooms, they now are expected to have their own adult-sized room. Where a small kitchen used to suffice, people now expect a huge show kitchen and butlers pantry that is double the size of old smaller kitchens. Or in a country such as China, millions of people have forgotten what living in a cave house was like for their grandparents.
- Complexity of expected amenities and public services have dramatically increased, resulting in people wanting to live inside large cities rather than spread out across small towns. People want to live within an hour of travel to a MRI machine and healthcare specialists. Or instead of shopping at one food store or dining out in one of two restaurants in a small town, people want to be within a few minutes of 20 choices of cuisine in a large city.
- Materials are more expensive because it has been realised that clear-felling old growth forest is not sustainable, nor is digging up the easiest to extract resources, and we're just starting to realise how expensive sustainable resource extraction actually is. As a result of increased quality of housing and infrastructure, materials are enormously more complex and varied.
- Safety standards for construction labour are significantly improved, even if just by worker and public expectation. It's no longer acceptable for labourers to be working in dusty environments or working at heights without scaffolding and harnesses having been planned and setup first.
- Increasingly affluent populations are aging and naturally reducing in size. In such a demographic shift, workers can prefer safer and easier jobs that don't risk life-long back and joint injuries and all the other types of health risks common to the construction industry.
by omgJustTest on 5/27/24, 1:15 PM
1.hyperconsolidation in lenders
2. Real estate orgs have worked together to eliminate downward price pressures.
3. NIMBYs and generally “home ownership associations “ have created so many barriers to building & reaped the profits in their own home values.
Some good news is that most populations are slowing or declining on the globe, and that ought to be a substantial risk to mass ownership, but that will take 20years to manifest.
by holoduke on 5/27/24, 2:12 PM
by bojangleslover on 5/28/24, 3:11 PM
-Cheap credit with ever-decreasing lending standards (not like 2006 though, not yet) -Population growth (whether immigration or births — does not make a difference, though babies can't buy houses) -"Pent up" demand, people who wanted to move during COVID but did not because of COVID (somehow), who now do want to move
Factors restricting supply
-Building -Zoning -Most of all: nobody wants to leave their 3% rate, and there is about 11T of outstanding mortgage debt, most of which at the 2020-2022 low rates
Factors inflating prices
-(Mostly) obsolete realtors charging 6% in a world with Zillow -Orgy of money-printing
by ubj on 5/27/24, 9:56 PM
I don't think the solution is as simple as just "cutting rates". Low rates lead to incredibly fierce bidding wars that can drive up the price by tens of thousands of dollars. An acquaintance of mine and his wife bid $50,000 over the asking price on a house in the Boston area a few years ago. They were outbid by an additional $60,000 (total of $110,000 over the asking price). Another acquaintance narrowly defeated 30+ other bidders (!) to get his house.
My wife and I bought a house last year during a time when rates were _highest_. Ironically, I believe this was actually a fairly great time to buy. Competition from other buyers was low, and sellers were more willing to negotiate because they didn't know if they would be able to sell anytime soon. And yes, we now have a higher interest rate, but that can be refinanced down the road.
It's a complex situation. I do hope for lower interest rates, but I don't think that alone is going to solve the issue.
by DataDaoDe on 5/27/24, 12:11 PM
by JumpCrisscross on 5/27/24, 8:41 PM
I’ve noticed roommates are not a thing for many people anymore, particularly among younger folk. Is this a post-Covid thing?
by 587846 on 5/27/24, 2:39 PM
I look forward to an article when housing prices retreat rather than increase.
by glitchc on 5/27/24, 8:45 PM
- Properties in world-class cities are in demand globally
- NIMBYism means it's hard to build new housing or increase density
- Resource costs and wages are high in world-class cities
The first one is a demand-side driver, the last two are supply-side drivers. There aren't any palatable solutions to reduce the impact of these drivers, at least not ones that do not negatively impact other sectors of the economy.
by alkonaut on 5/28/24, 1:00 PM
My mortgage (not UK) are just fixed in various parts on various semi-short terms (3 months, 1year, 3 years etc). The shortest ones are basically the current interbank rate plus 1%. The 3 year one is the banks expectation of interest over 3 years, plus a small margin and so on. For 10 year or longer the current rates are 4%.
Why are interest rates so much higher for mortgages in the UK, despite often demanding longer fixed terms? Is the risk massively higher? (My loan uses the home as collateral but also future income, meaning if the home becomes worthless I'm still on the line for repaying the lone for as long as it takes, I can't just leave the keys and let the bank eat the risk).
by cush on 5/27/24, 2:37 PM
by FooBarBizBazz on 5/27/24, 3:52 PM
"Here's a nickel, sonny."
by BenFranklin100 on 5/27/24, 2:21 PM
by ayakang31415 on 5/27/24, 8:17 PM
by patall on 5/27/24, 8:37 PM
by tap-snap-or-nap on 5/27/24, 9:27 PM
by rr808 on 5/27/24, 12:22 PM
I see it in my parents that they're pretty comfortable staying in the family house as long as possible, I'm happy with this. It is made a lot easier by the fact that prices keep going up so staying in a house that is oversized financially is rewarding.
I'd like to think it'll all come to and end one day as the spiral reverses, but I've been wrong for so long now I'm losing faith.
by RugnirViking on 5/28/24, 12:11 PM
by iancmceachern on 5/28/24, 6:29 PM
Same with startups, anymore many of them are setup as attractive financial products, not attractive businesses.
by phendrenad2 on 5/28/24, 6:22 AM
by DogOfTheGaps on 5/27/24, 11:36 PM
by akskos on 5/28/24, 1:02 PM
by Stranger43 on 5/27/24, 2:29 PM
The reason Home Ownership is desirable is that the pricing of houses go up faster then both inflation and depreciation caused by wear decreases the utility value of a dwelling, and the reason that houses are expensive is that the state actors are invested enough in this cycle to make sure it never really breaks.
In a real functional market there would be no real benefit to house ownership over long term leases. but were dealing with a market thats been deliberately broken by policies promoting home ownership for reasons that's fundamentally religious/dogmatic in nature.
by fl0ki on 5/27/24, 1:02 PM
I hear people who are already in the top 1-2% in income are told their borrowing power is only A$1M (~U$660K) while houses at all worth raising a family in cost A$3-6M. Banks don't seem to want to lend to them because they could instead lend to yet another property investor that already has a portfolio full of equity and collateral. The houses will sell and the mortgages will close, the banks can afford to be picky.
If you work in tech non-remotely, you're looking at the high end of that because you're competing with everyone else working tech, heavily weighted towards Sydney, and the rest of the country's housing supply is largely irrelevant. The cities certainly aren't designed for car commuting, so the supply of locations is further narrowed to places that are either so close they're walkable or have good public transport.
To my US readers I cannot emphasize enough how much this limits people's options both ways. When you have a non-remote job it limits your housing options, and if you're lucky enough to lock in a house, now it's limited your employment options in return. This isn't great for housing or employment markets. I'd like to think remote work has helped some people, but the most career-focused people I know are sticking to in-person connections, competing with everyone else doing the same.
Meanwhile cashed-up investors can buy up several houses and neither live in them nor rent them out. They're taking supply away from both the buying and renting markets, which is their legal right and a smart move on their part, but totally dysfunctional for the market as a whole. Anyone who does buy a house to rent it out is doing their small part to make buying less affordable but make renting more affordable, making it just that little bit less likely that the next person out there is a buyer of any kind.
Of course there's been doomsaying about a housing bubble pop for decades, especially during the world-famous pandemic lockdowns. Nothing popped and the exponential runaway pricing continues. Surely it's getting untenable enough to pop somehow, if my successful friends can't buy houses then I don't know who's left in the market except the real estate investors themselves.
I honestly don't see how I can un-expat now, and I'm just counting myself lucky to own property in the USA. If I want to keep this sweet deal, my options for moving are more limited than they've ever been, but it looks like a lot of people would gladly sacrifice flexibility to have anywhere near a tenable deal on housing.
by 3vidence on 5/28/24, 3:50 AM
Our population is currently increasing by over 1 million people each year and it is 98% immigration.
I think an odd effect of very very high immigration is that everyone who arrives is presumably of working age and needs to be housed outside of a family unit. This puts immense pressure on a housing supply that is already decades behind where it should be and as a result prices are exploding.
Canada as a country has a population of about ~40 million people. The main country we are getting our immigration from is India with a population of nearly 2 billion. There is no possible world in which Canada can construct enough housing for the nearly infinite supply of people that it seems to be importing
A recent study showed it currently takes on average 10 years to go from acquiring a piece of land to building an apartment. This is clearly problematic but there is a physical limitation on how fast housing can be constructed.
by blondie9x on 5/27/24, 2:19 PM
Fixing senior living options will create inventory in the market and give seniors better choices with an active community.
by lwansbrough on 5/27/24, 7:25 PM
It is probably exceptionally challenging to manage the economic fallout from such a correction, but I believe it has to happen. I would also support draconian measures which would forcibly and retroactively destroy accrued home value to ensure we haven't extracted wealth from the younger generations. I realize this is unprecedented and probably unconstitutional, but that's my emotional response to the problem. It is plain as day: Boomers extracted the wealth out of the country and now they're extracting the wealth out of their kids. It has to be stopped.
by atemerev on 5/27/24, 1:06 PM
by xbar on 5/27/24, 11:18 PM
Maybe that was not in the public's interest.
by CrispyKerosene on 5/28/24, 6:03 PM
by housingqueen on 5/27/24, 11:50 PM
On top of the weird collective delusion, most ignore the huge financial/time burden that is owning a home. It is not cheap, and anyone that tells you otherwise is *literally lying*.
There’s the never-ending maintenance that costs thousands per year in both money and time, small problems can cost thousands of dollars to fix, variable property taxes, variable insurance rates, having an asset worth being sued over, shitty neighbors that you can’t easily move away from, bad school districts, etc etc etc.
Is home ownership right for _some_ people? Sure. Is it right for the majority of people? Probably not. Should corporations be allowed to own housing? Hell no.
by amelius on 5/27/24, 10:15 PM
The game is rigged. But that should be no surprise. People who enter a game of Monopoly after a few rounds have been played know that they will be swimming against a strong current. Our financial systems are unfair and broken.
by throwaway22032 on 5/27/24, 8:38 PM
The man on the street wants less immigration and more housebuilding so that they can start a family.
The political class seem to want to just import a ton of low skilled foreigners because they'll take lower living standards.
It's ass backwards. The solutions are obvious.
by RickJWagner on 5/27/24, 7:32 PM
It's a complete mystery why inflation has run amuck.
by gghffguhvc on 5/27/24, 11:49 PM
by mkl95 on 5/27/24, 10:09 PM
The man used to be an upper-ish class dude (p96+), but due to how horribly slow and uneducated governments are at making data-driven decisions, the man is now a working or middle class dude.
As a result, you will see property prices skyrocket in your area while the government takes 50%+ of your 5% pay raise, leaving you only some pocket change richer than before. But the property owners in your area will be richer every year because their great grandad hunted a bunch of whales or some shit, and so called progressive policy makers are clueless about wealth distribution.
by fortran77 on 5/27/24, 8:12 PM
The only solution, of course, is to build more houses! Build until prices fall! (And don't bail out people who are now underwater because prices fell.)
by curation on 5/28/24, 3:46 AM
by foobarkey on 5/28/24, 10:06 PM
To be honest I don’t think capitalism is able to fix this problem, the only solution I see if government takes over and subsidizes housing enough from taxes to make it more affordable for salaried employees (needs to come with strings attached so the free market does not turn a quick buck reselling)
by ljsprague on 5/27/24, 10:41 PM
by magicloop on 5/27/24, 11:05 PM
Note US GDP looks great until you realise that it is in dollars whose nominal purchasing power is diminishing. There is no better was of seeing this than in the price of housing.
by tuatoru on 5/28/24, 5:02 PM
Here is mine. The Boomers, the generation born 1945 - 1965, benefited from affordable housing, and when it grew up, set about making housing an investment.
'Affordable ' and 'investment' are mutually exclusive. That is why supply is not keeping up with demand, and why there are so many unoccupied houses.
by thebigspacefuck on 5/28/24, 2:59 PM
by fullshark on 5/27/24, 7:56 PM
by TriangleEdge on 5/27/24, 2:34 PM
by jmyeet on 5/27/24, 11:06 PM
So let me explain somethign that is often misconstrued about leftist sentiment, be in socialism or whatever: leftists generally make the distinction between personal property and private property.
Private property is what we have now. We have wealthy landlords buying up houses to drive up prices. We have single homeowners who think their home value is going up so that's good for them so they vote for these policies. A leftist position is that you're entitled to own your personal residence but there's next to no landlording. Housing is a basic human need. The only way to provide it in a sustainable way is with social housing. For example, the majority of housing in Vienna is social housing.
The UK came really close last century to ending landlording [1] (ie councils simply bought houses from landlords who wanted out).
But if you think about it: there's no way your $200k turns into a $600k house without that money coming from somewhere. You're taking it from the next generation.
Capitalism loves this because a) a bunch of capital owners become even wealthier and b) debt-laden workers and workers who will take any jobs they can get (ie it suppresses wages).
In the 1990s, the average house price in London was ~70k pounds. Now it's over 700k.
Pretty much everything bad about modern society can be traced back to private property, be it intellectual property, housing or whatever.
People need to realize that if your house triples in value, you haven't really gained anything. If you sell it, what now? You still have to live somewhere. That means higher rents or buying an equivalently priced home. Or downsizing or moving overseas. This is why housing is unlike other assets.
we, as a society, have decided to prioritize generational wealth from landlording by literally killing people by denying them housing.
[1]: https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-...
by NoLinkToMe on 5/27/24, 8:45 PM
The discussion on housing should start with one fact: the supply of housing has been growing faster than the size of the population, decade after decade, for a very long time.
This is why the number of people per home, has been dropping decade after decade. That is a measure of luxury. We can afford homes with fewer people. People can afford to be single and live alone. We can afford not to take in a roommate. Couples can afford to each have their own home. That's not an indication of a housing crisis or being priced out.
Then there is home size, it has been increasing also, decade after decade. We can afford to live in bigger homes. Again, a measure of luxury.
Anecdotes about 'my (grand)parents lived in XYZ home that's way bigger than mine' are just that, anecdotes. The data shows we live in bigger homes with fewer people, in fact we have double the housing that we had a few decades ago. In other words, the average person's lifestyle with respect to housing has greatly, greatly improved compared to previous generations.
What is often also not mentioned is that affordability is not a function of prices only, but of prices x the cost of money (i.e. interest rates). In the 1980s interest rates were as high as 18%, now it's 1/3rd of that at around 6%. That's the true cost of housing. Taking $1000 and paying off $1000 in debt has no impact on your equity, you're as rich as you were before the transaction. Paying interest however is money you'll never see again. That cost was 3x as high a few decades ago. Prices haven't tripled when adjusted for inflation and salaries, not even close. That's why affordability of housing isn't the disaster that many people think it is.
Here is an old source (2016), which you may think is outdated. But it shows a multi-decade trend that cuts across the same price increases we've seen in recent years:
https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...
For another source that runs to 2020: https://humanprogress.org/u-s-housing-became-much-more-affor...
I'm not even going into how the function of housing has changed. With today's connectivity (netflix, spotify, internet, food delivery, teams/slack, amazon etc), it has become more than ever: an workplace/office, a cinema, a library, a music studio, a game hall, a restaurant, a shopping mall. Its value has increased.
No, I'm not saying finding housing is super easy for anyone and everyone. I recognise many find challenges. But what is simply not true, is that it is any more difficult than the past. In fact it has never been easier. What appears true however is that our lifestyle expectations keep increasing faster than our lifestyles are improving.
by SuaveSteve on 5/27/24, 10:53 PM
by rzwitserloot on 5/27/24, 10:12 PM
Low interest rates raise house prices. This has to be a 'duh' thing, really, but, governments don't really appear to 'get it', or, play dumb for political reasons. If, after adjusting for inflation and the like, the exact same house costs €500,000 in 1980 but costs €1,000,000 in 2024, BUT, interest rates in 1980 are double what they are in 2024, your mortgage cost to buy that house is __pretty much identical__.
It's oversimplified to say that this means 'real house price has not changed'. It still takes more money to actually buy that house. But, of the money you pay every month for your house, more of it is a weird, not very liquid investment portfolio, and less of it a weird form of rent. It's got all sorts of problems: Not everybody qualifies for a mortgage in the first place, for starters. But _in the end the amount of money you have to burn just to live in a house is identical in this hypothetical scenario_.
One lesson you could learn from it is that everybody is whining and houses are just as affordable as they've always been, but that's not my point, and isn't really true. The point is more: With low interest rates, house prices skyrocket.
This explains _some_ high house prices, but certainly not all.
For example, China's is an utterly different explanation. Due to the way their government is set up, the usual benefits of a free market, namely that the population 'intelligence of the masses' their way to efficient allocation of resources isn't a thing china 'does', in essence. Government decides what happens. And so far, they've decided to build more houses than there will ever be chinese people to live in them. Ever. This is a bit of a problem today and will be far more of a problem tomorrow. But that's it. That's the simple, sufficient, and therefore only required explanation. It has NOTHING to do with how hard to it is to build in China (it is not), nor with population growth (it doesn't, or rather, a sheer and severe drop in house prices looming, that'll be explained by China's population glut). It's just that: They built way too many, and their market system cannot respond in kind to stop that runaway process.
In europe, yes, in large part runaway NIMBYism and being at the forefront of ecological change, putting limits on how much nitrogen/co2 can be 'used up', and building does take quite a bit of that - has put the breaks on building. Especially combined with extremely low unemployment which hurts the building sector. "Too few houses being built" is a factor.
But not the only one. And I think, not even the largest one.
Yet another explanation is lack of efficiency: Fewer people partner up, so, more people live alone. They tend to use space inefficiently: They all want their own kitchen, their own shower, their own living room, their own bed room, their own hallway, and so on. A really cheap and ludicrously efficient solution to _that_ is dorm-style living together. Instead of having a small crappy single-tenant kitchen, why not have a giant luxurious very well stocked kitchen you share with 9 other solo tenants? Yes, there are all sorts of downsides to this (which lout has made a mess of the kitchen?!? - and nobody wants to deal with a cleaning schedule), but in the end it is vastly more efficient, and better for social cohesion.
Society in e.g. europe and the US has not, yet, adapted to it. I hope it will. It'll solve the unaffordability of housing crisis all on its own if society wants to invest in it.
by fallingsquirrel on 5/27/24, 2:09 PM
by xnx on 5/27/24, 3:38 PM
(I thought there was some dupe protection for exact urls in such a close time period?)
by ChrisArchitect on 5/27/24, 2:39 PM
Discussion: https://news.ycombinator.com/item?id=40489250
by ChumpGPT on 5/28/24, 2:31 PM
In places like Toronto, huge influx of people where the city doubled in size in a few short years not only putting strain on housing and rentals but everything (hospitals, roads, schools, you name it).
In places like Texas the huge influx of out state people drove up prices where housing in DFW basically doubled in price since 2019. Very much like what Toronto went through. Migration from high tax states to low tax states has now made low tax states high tax states and Texas is becoming very unaffordable quickly.
Don't know what the end game is. In Ontario, Canada what use to cost 200k 10 years ago now is 1 million. What use to cost 1 million is 5 plus million and there is no end to the madness. You have foreigners from Arab countries, China, India paying cash for 2-3 million dollar homes.