The reasons we don’t have enough homes is because governments have made it illegal to build enough new homes to meet demand.
You are essentially say that the presence of car collectors leads to car shortages.
You are essentially say that the presence of car collectors leads to car shortages.
That doesn’t impact the normal market though.
> You are essentially say that the presence of car collectors leads to car shortages.
The price of a old car, a new car, a cheap car, and an expensive luxuary car, all vary greatly. Cars are more or less open for purchase by everyone.
Houses a fixed in a location, you cannot pick it up and move it. Let's look at each point.
1) If a house in a street costs $200,000. And you have a ton of money and go online and find the house and for you it doesn't even tickle your bank account. But you want to get some money out of your own country and into another country as a safty net or investment. Or maybe you move to said country and your buying power is much greater than the locals.
"Oh, its ONLY 200k? Heres cash"
The house next door is like "huh, the market value of this street is 170k and he sold his house for 200k? I'm gonna list mine for 220k"
"Oh, it's ONLY 220k? Heres cash"
The house next door is like "huh, the market value of this street is 170k and he sold his house for 220k? I'm gonna list mine for 300k"
"Oh, it's ONLY 300k? Heres cash"
Mean while the locals are like "oh I only needed a 20k deposit, now I need 30, 40... 100... 200k deposit"
Locals are getting priced out of their own country. This happened in NZ and Australia.
2) This I don't know how you can dispute. It's a fact that 100 years ago, houses were an asset, not an investment. Why do people need to own more than 2 houses? There are people who own, 5, 10, 30, and even more. There are businsses setup around buying property to rent it out.
What has happened is people got into the market early, with houses that cost 100k, 200k, maybe even close to 1 million dollars. And each time they buy and remortgage the house to leverage buying another property, to rent it out, use that to pay the mortgage payments, which in alot of cases rent is MORE than the mortgage.
Yet the people PAYING Rent are not in a position to get a loan to buy the same house. You often here "oh just buy a house, because renting you're paying someone elses mortgage". How to you do that when you cannot get a loan to buy the same house? How is it fair?
3) Housing Shortage. 100 years ago, people would buy property, and pay a builder to build a house on it. At some point this more or less got flipped and its builders and property developers who buy property, build a house, then sell it.
You do not need governments to build houses to solve the problem. People are simply priced out of being able to build houses. It's MUCH harder to buy an empty lot, and get a loan from a bank to build a house on that lot now.
Can governments assist with housing shortages, ABSOLUTELY. But you cannot simply blame the government on the housing shortage aspect because they aren't building enough. There are much bigger issues causing the problem.
I will make one point: in the US, it’s never been the government’s job to build homes. That’s always been left primarily to the private sector. Right now however, governments won’t allow the private sector to build enough homes. They’ve made it illegal, especially apartments.
It’s like if the government banned the production of new cars. In a few years time, a 1995 Honda accord would be worth $20,000.
The US however is a huge plot of land with varying housing prices across the country, even if you had foreigners buying properties, it doesn't have the same impact on the country as it does in NZ/AU/Canada.
Populations:
Canada: 38m
Australia: 25m
New Zealand: 5m
US: 332m
The impact hurts us more than the US.
That might be technically correct on the build part, but the US government used to subsidize home ownership through loans as described in [1], e.g.
> GI Bill benefits that guarantied home loans helped many Americans buy houses and move into the suburbs.
But the actual building of homes is left to the private sector, which is frequently banned from building new homes by local governments.
It’s a strange situation: the Feds promote home ownership, while local governments make home ownership difficult by limiting the number of homes that can be built. It’s little wonder the housing market is so dysfunctional.
if they cannot get a loan to buy a yacht, or a lambo, how come you don't make the same argument?
Owning a house is not some natural right. Being able to afford shelter is, and renting accomplishes that. If rent is skyrocketing, then there's a problem and the gov't needs to address it. But rents have not grown in relation to the cost of the house - in fact, rent is cheaper in most cases.
> You do not need governments to build houses to solve the problem.
no, but not because of the reason you said. It's because the gov't (or more correctly, the local councils) is preventing new builds via zoning, as well as cultural preferences for standalone house, rather than dense living in high rises.
> "Oh, it's ONLY 300k? Heres cash"
i dont know if you've been misinformed, but foreign buyers haven't been a problem in australia (and NZ and canada) for a while - ever since 2018-2019. Most of the demand for real estate are from locals. Using foreigners is a scapegoat.
> Owning a house is not some natural right. Being able to afford shelter is, and renting accomplishes that. If rent is skyrocketing, then there's a problem and the gov't needs to address it. But rents have not grown in relation to the cost of the house - in fact, rent is cheaper in most cases.
Its in your best interest for someone to own their own property. Owning property is one of the key aspects of retirement. If people have no money or property at retirement then you end up as a tax payer, paying for the persons retirement. That causes you to need to have higher taxes to fund peoples retirements.
Owning property is also a safety net, if you lose your job, atleast you have a roof over your head. If not, well, youre gonna pay for it as a tax payer by giving the person the benefit or dole.
> i dont know if you've been misinformed, but foreign buyers haven't been a problem in australia (and NZ and canada) for a while - ever since 2018-2019. Most of the demand for real estate are from locals. Using foreigners is a scapegoat.
Just because after 2018 they didn't influence prices doesn't mean the market didn't get inflated because of them. I've met people in Singapore who are not PR or Citizen in Australia who own property in Australia and just rent it out to make more money. I've met 1 person from China who owns multiple properties in NZ and AU. Who had holidayed in AU but never been to NZ.
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The main problem here is people don't want to pay taxes, but want the government to bail them out at every possible road block. They want the government to protect them when it suits them, but 'fix' it if it suits someone else but not them.
So if you remove the government then you need property ownership to go up, if you want more government involvement, you need higher taxes and more rentals at lower costs.
No it’s not
https://www.lendingtree.com/home/fha/getting-an-fha-construc...
Also the US still has states you can find good jobs in with houses that are still 200k. In the likes of NZ You have Auckland and wellington and prices that far exceed majority middle income workers.
Imagine all the usual shitty mis-communication and last-minute paperwork of dealing with a mortgage agent... plus last-minute fun with contractors, who are used to answering on a very different schedule. E.g. "Oh, I need 2 more competitive quotes for the same work in the next 2 days, even though you've already found your contractor" or "Oh, these quotes don't specify exactly the same work, so need to be redone."
At the end of the day, the process requires you to waste a lot of contractors' time soliciting bids for work you're never going to hire them for.
Hindsight 20/20, I would encourage finding any other method of financing work. Make your mortgage as simple as possible, so there's a chance the agent might not @&$# it up. Then deal with contractors on your own timeline.
I did that twice…
Both times in metro Atlanta.
I'd hope the new build market is a little more professional.
Although I saw a couple strip-to-frame-and-rebuild houses worked on and then failed code (word on the street was improper framing nailing, ouch) near another house in Kirkwood, so I guess there's dipshits the world over.
Cars and Houses do not perform in the same way financially.
Houses tend to increase in value, Cars tend to decline in value.
There are, of course, outliers in both markets.
this is an observation that may be mostly supported by data right now, but also is not super meaningful.
WHY do houses appreciate? why do cars depreciate?
The answer is supply and demand: supply of housing is far more regulated than supply of cars - height limits and zoning are frequent reasons, but any sort of building approval process with unnecessary hurdles can increase supplier risk and cost. Most of these processes aren't set up with demand in mind. whereas if you are an automaker and want to churn out another 10000 cars, there's no laws stopping you (fuel efficiency / emissions requirements notwithstanding).
The problem with houses is that since a large portion of the population thinks they are investments, anything that would increase supply would devalue their investment, so fixing the regulations around them is a political quagmire.
I suppose cars, as machines, also have increasing maintenance costs over time. the same is true of houses, just over a much longer timescale... if houses depreciated instead of appreciated, we might see more torn down after 30-50 years rather than always repairing everything. Certainly the tradeoffs would start to look different.
<ducks>
And when land appreciates in value (aka by being near schools, hospitals, and well-paying jobs), we distribute the higher cost of the land among multiple homes by building taller, denser types of housing. This is presently illegal in much of the US however.
Still cheaper than a 2 bedroom apartment in Beijing.
The beauty of new homes is that they give the Amazon tech bro something to buy instead of coming into your neighborhood and bidding up the price of the older homes. That’s the good things about new homes: They help keep old homes cheaper.
In the USA, anyways, many people left the home construction industry after the 2008 crash, and didn't come back when things picked up again. That means...no apprentices were trained up, experience was lost, etc...so labor costs have shot through the roof because experience is quite limited.
And try even renovating an old home! You get quotes of like $150k just to do a kitchen.
They don't have to. This happens when an area gets popular and zoning regulations don't allow enough new supply to meet the demand.
Your comment would be ok without that first bit.
Normally I'd never do that without getting your permission first, so if you object, please let me know and I'll put it back forthwith!