Comment by Aurelius3 | Hacker News Reader

Comment by Aurelius3 | Hacker News Reader

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This article and the other articles on this subject by the author confuse me greatly. He claims that the housing is extremely affordable in all of these countries. The countries he mentioned as good examples or large improvements are Japan, Germany, France, New Zealand, and the United Kingdom. Yet the home ownership of all these countries is around the 60 ~ 65% mark according to wikipedia[1], In germany it is as low as 51%. And this number is for the entire country, This number would be even lower in the urban cities I would wager. If the housing was truly affordable then why is home ownership so low? Furthermore looking at the highest home ownership rates it is mainly ex socialist countries, China, India, smaller Asian countries, and some Caribbean countries. I would guess that the large push to create commie blocks then the subsequent liberalization and deregulation in ex socialist countries is a large factor in this. So if the author wanted examples of "Doing housing better" (subjective) he should have looked elsewhere.

[1]: https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...

> If the housing was truly affordable then why is home ownership so low?

If rent is dirt cheap, and tenant protections are large, most people prefer to pay little rent, and invest their money in stocks or some other asset, than put all of their money into a single asset with very questionable performance and high risk (a house).

You can have financial independent, fully passive income from stocks, and just pay a little bit of rent with it. Or you could have a house, be tied to a 60 year credit plan, and have to work until you are 70 years old.

>60 year credit plan

Don't be disingenuous, the fact that home ownership is high indicates that the housing is cheap, and cheap housing dosen't require a "60 year" credit plan to obtain. Indeed, I would wager it is the countries with lower home ownership rates that require a large mortage and high debt to pay off.

At the moment, you can borrow large amounts of money at ridiculously low interest rates. That's why people can pay more. But that doesn't imply that they can ever pay it off.

I wouldn't consider the UK as a good example of affordable housing.

First of all, compared to the rest of Europe houses are small - my parents have a house that's slightly larger than the average, it has 3 bedrooms in 90m2 including the garage. The housing stock - even new houses - are all pretty inefficient and need a lot of energy to heat. The rest of Europe has been pushing energy efficiency standards (in terms of heating demand), especially Scandanavia and the Baltic's, while the UK has pretty much stood still and builds houses today the same as they did 30 years ago.

For this you are going to be paying a lot. Two people on average salaries would not be able to get a mortgage for my parents' house, and it's not anywhere near London or other big cities. And that's assuming you could earn an average salary - in their area that would be a bit of a push as most of the jobs are in the service and tourism industry.

Lower home ownership may be an indication that the rent/buy tradeoff moves more towards rent, and that it's less critical to use leveraged asset price inflation to build wealth.

But you're right that any article describing UK housing as "affordable" needs suspicion. Should also compare by size; the one advantage the US does have is much larger houses, on average.

Because the goal is affordable housing, not necessarily home ownership. With affordable rent, people can invest their money into other, better-diversified assets. They can move more easily (due to growing family size, different work situation, geographic preference) with lower transaction costs.

I agree on the diversified investment idea, but wouldn't also owning a home add even more diversity to ones portfolio? In a lot of these countries at the top of the wikipedia list it is possible to invest elsewhere as well as in a home.

The typical person will only ever be able to afford at most one apartment/house (simply because if everyone has more than one, nobody would be willing to rent the "extra"). So, by definition, this means that for most people it would be a significant if not outright majority of their net worth. So no binding that much assets in one class would decrease the diversity. If you want to be exposed to housing: Buy an appropriate fonds for a fraction of the worth of a single apartment/house

Isn't that the problem with the canadian and American housing market?

Most people are all in on housing and can't afford to diversify after that, thus, the government cannot let the market crash without wiping out the wealth of the majority of its citizens

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