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Comment by asdfasgasdgasdg | Hacker News Reader

These evil bogeymen are something people believe are very common, but I can't find any solid data on their prevalence in London. People also claim these guys are ruining NYC real estate, but our vacancy rates are below 5%, and most of the places that are vacant are not long term vacant.

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The evidence is all circumstantial because it’s difficult to definitively prove someone owns a property with absolutely no intent to live in it or rent it.

Further, the properties held purely as assets are generally very expensive ones. The effect ripples down, well heeled people move into cheaper housing and those people moving in turn.

This is nearly 8 years old, but generally describes the issue with some specifics:

https://www.theguardian.com/society/2014/jan/31/inside-londo...

> The evidence is all circumstantial because it’s difficult to definitively prove someone owns a property with absolutely no intent to live in it or rent it.

Vacancy rates are extremely low. That puts an upper limit on the amount of people that could be doing that. Is it not easy to tell if a home is vacant?

How are vacancy rates calculated? I have a feeling it's a statistic that doesn't correspond to reality well.

I’m pretty sure vacancy rates pertain to available rentals not owned property that is off the market.

It’s much more common in commercial real estate but people confuse the two.

Some very select markets may have an actual problem if foreign money laundering is a thing (as I’ve heard is true of Vancouver).

Yeah, I have noticed lots of commercial vacancies in NYC. My understanding is that this is because the leases are so long and thus the prices are not as adaptive.

And commercial loans are VERY dependent on "building income" which is calculated based on lease rates, even if not "leased" in some cases.

Lowering rates can cause loan problems.

Makes a body wonder why buildings don't just sell their ground floor real estate to get it off the books. There must be some reason, otherwise they would, but it seems like a neat solution to the problem.

Yeah. I was looking to rent a NYC luxury apartment recently and noticed that any reasonable deal gets snatched up very quickly. These apartment complexes do feel empty because the residents tend to be childless, so maybe that's where the confusion would come from. It's sad to see more and more people these days are in denial of basic economics. It's strictly better to rent an apartment out because otherwise you're getting nothing from paying management and taxes.

>It's strictly better to rent an apartment out because otherwise you're getting nothing from paying management and taxes.

Renters can choose not to pay rent, can cause untold damage to the property and can use it for illegal purposes to name but a few reasons why it might be rational not to rent a property out, specially if it's an appreciating asset.

I suspect that the majority of these empty properties are owned by wealthy people from countries like China or Russia.

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