House prices are only high because everyone is over-bidding to buy them. And that's driving rents up.
Now this is different to the question of whether you should individually follow the crowd in a country where everyone over-bids on property. If you don't, you still pay a high rent to repay the massive mortgage of the guy who bought the property. And in a country like the UK, there is a massive moral hazard: because so many voters are all-in into property, politicians will do anything it takes to ensure prices never go down, even if that means printing massive amounts of money, robbing savers from their investments, having negative interest rates, etc. In that world, it probably doesn't make sense to bet against the central bank.
But as a society I think it is a bad allocation of resources.
If I claimed housing benefit, they would look at the formula, and tell me "Your housing benefit is a maximum of £x: if your rent is more than that, you have to pay it out of your own pocket".
The formula dictated the maximum rent for state-subsidised housing: almost no tenant claiming social security could afford to pay above the subsidised amount from their own pocket.
However, the formula accounted for rental prices in the region over the previous few years, and effectively acted as a price escalator. All DSS landlords priced their rent at the maximum permitted, and the subsidy therefore regularly increased with their prices. As a result, buy-to-let became very popular, with a number of training courses/presentations pitching this price-escalation practice, which also helped sustain the price escalation.
As rental prices increased for state-subsidised landlords, unsubsidised private tenants also had their rents increased, both sectors mirroring each other.
The government have since introduced caps to various benefits, which may put a stop to the routine escalation, but it's a good demonstration of some of the legislative flaws. For most people, a place to live is high if not top on their priorities, and most debt advice councilors recommend paying rent/mortgage as the top priority, above every other bill, so even given excruciating increases, most people will still pay it.
There's a reason why even rich, successful businesses rent office space instead of buying. They just can't manage a property as efficiently as the companies that focus on that.
For many businesses it absolutely makes sense to own your own property. For example, if mid-way through a 20 year lease on a building the economy goes bust, do you really want to be paying the same rent that was negotiated during boom times? It could destroy you.
There's textbook theory, and then there's reality. The real world is an incredibly complex system with innumerable variables, and can't be reduced to simple concepts like "specialization". It all depends on context. Obviously for most companies it doesn't make sense to own their property. There's no disputing that, and your point stands. But for rich companies, it often actually makes a lot of sense, notwithstanding insiders trying to extract value for their personal benefit.
These big companies do not manage one single house (office). They manage a real estate portfolio. Most of big companies have a mix of rented and acquired office space. Ultimately, owning real estate or not is an investment decision.
Some big companies, like HP recently, went from owning most of its real estate to sell large chunk of it ... Reason is to get some cash flow and to rationalise some expenses. But not because someone else could manage better their real estate.
Outsourcing stuff always costs more, because you have to pay for the profit of the company you're outsourcing to. It's worth it when it's something you don't do that much of, or aren't very good at, but if you do a lot of it, it's worth it to do it yourself.
For an extreme example, think about printing: is it worth it to outsource all your computer printing needs to a specialized printing company? Or should you just buy a laser printer for $100-500 and do it yourself? It doesn't take very much printing for it to be a massive waste to pay someone else to print stuff for you.
No way. My family of four eats around $250 of food every week. That works out to $3 per person per meal.
The other expenses would have to total more than $600 before we would break even eating fast food every day. The food we make at home is considerably better than fast food, so I think it would cost an extra $1000 to eat out than cook at home.
This mode of thinking is interesting, but it's usually overrated as a way of deciding on time value. Most people have a job that takes some time and pays some money, but they can't arbitrarily work a little longer for a little more money as they desire.
This isn't to say your time value might not be high enough to justify not cooking... but it's usually a complex calculus, that involves assessing what you would actually do instead of cooking (for many people, that might just be zoning out in front of the football game), and figuring out the expected future value of it (eg spending the time reading a book may provide you with future intellectual or financial wealth). But then you also have to factor in the human growth from cooking: maybe you'll be a happier person if you cook more frequently.
This is quite a web, but I guess that's the point in my opinion. Annual salary divided by minutes worked in a year feels like a slam dunk way to make these decisions, but it's really not rich enough.
For many of us, time with family, friends, hobbies, is a relaxing and physically/mentally/emotionally healthy thing to engage in, rather than trying to exploit every waking hour for income.
I think the takeaway is that if you prefer coding over cooking then that's justifiable from a financial and time efficiency point of view. If you prefer cooking and the presumed family quality time over (even more) coding then that's also very reasonable.
Just the transit time for a meal out is already going to cost them a great deal more productive time than cooking would. They don't mention Soylent or frozen meals, which are really the only viable way to spend your time more productively than either meal prep or eating out.
I guess I don't make the most involved meals, but they certainly taste good.
EDIT: Besides, why can't the time I spend cooking be with my family or friends? Not like my home is big, if my girlfriend doesn't want to be in the open floor plan kitchen/living room/dining room and would rather hide in the bedroom, I guess she can. Would be awkward. Similarly for when friends are over. It's not like I need intense concentration while I cook, just enough to not burn/cut myself or burn the meal.
Eating out at a nice sit-down restaurant takes a huge amount of time. I can cook myself a meal at home and eat it in much less time than going out.
The only way it's faster to eat out is if you get fast food takeout, which is absolutely shut nutritionally and will put you into an early grave.
You sound like all the dummies who think I'm wasting time by changing the oil in my car myself. It takes me less time than making an appointment, driving all the way to the dealership, then sitting there and waiting for them to do the work (which probably takes longer than me because they have a bunch of cars to work on and their scheduling isn't perfect, just like a doctor's office), then driving back home. I can do it myself in my garage in 15 minutes. I can't even drive to my nearest dealership in that time. On top of all that, you have to figure how much work time I'm missing in the process, since auto shops aren't open weekends or evenings usually (and especially not dealerships).
Taking on contract work is a non-trivial time investment. I can't just work for ten minutes whenever I want to pay for takeout, I will have deadlines to meet, which means less time with my family. I've done it, no thanks.
I don't think he is saying that. As an individual it may be better to invest in the house. Depending on many individual factors. e.g. Capital gains, timeframe, etc.
What I think he is saying is that collectively it is better for society that more people invest in productive activities that generate new wealth.
It's incredible that we've gone this deep into thread and subthread talking about aggregate economic benefits and not once mentioned families and children.
Never mind the plants you're buying at the nursery - what is the long range economic impact, in the aggregate, of creating additional human beings ?
(which, according to many, works best in a stable environment of ownership)
Unless your family can't afford maintenance, upkeep, insurance, and taxes.
Having 100% of your net worth in your home is very risky and comparable to having 100% of your net worth in a single stock.