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Comment by smcl | Hacker News Reader

Not Northern Europe, but Czech Resident here. There has been an explosion in house prices here, a truly wild one. I bought my place for 3.6m CZK about 7 years back and according to a recent valuation practices is "worth" nearly double this now. It is fucking wild, and tbh I kind of hate it.

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In US markets, prices have basically tripled from what they were 7-9 years ago.

That is not accurate, though in some specific regions it may be true. Overall, prices right now are just a little above twice what they were at the low point in 2012 [0]. From 7-9 years ago, even at the high point we were less than double.

[0] https://fred.stlouisfed.org/series/CSUSHPINSA

Uh... big asterisk here depending on where you live.

Is it? It 'feels' like true for places where most of the population lives.

Almost certainly not true of where I live in the western exurbs/suburbs of Boston. Maybe in the city though even that seems high.

It's true for places that people are actually moving to, like Florida, where prices literally tripled, and Texas, where it's more like 2.5x (but higher in metro regions like Austin):

https://www.statista.com/statistics/1100168/single-family-ho... https://www.noradarealestate.com/blog/texas-housing-market/

But across the country the median is more than double from what it was.

That has been going on for decades in the Netherlands, I bought a (newly built) home in 1996 when the country still used the Dutch Guilder and sold it for the same amount in €uros in 2002. One Euro translates to 2.21 Guilders, i.e. the house sold for more than double the price in 6 years time. For what I got for a relatively modest semidetached house on 220 m² of land in the Netherlands I could buy a 22 hectare farm in Sweden with money to spare. Ridiculous, that is what it is.

Sweden is a pretty sparsely populated large country and there's quite a wide range of property prizes reflecting this. In denser areas the prizes are probably more akin to those in the Netherlands. Just took a quick look at hemnet.se and right now you could get a farm for anything between ~30,000€ to ~10,000,000€.

Also Sweden like Finland is quite long country. And when you go north the value of land really drops as productivity drops specially when you get to beyond artic circle.

This is true but not relevant in this case given where I live, Västra Götaland in the west of the country. Farmland and productive forest come with a premium here.

Sweden also has most of its population live below the Uppsala - Karlstad line, i.e. in the lower third of the country. Then there is the fact that good arable land and productive forest comes with a premium here. Our farm has both of that, lies between Vänern (the big lake) and Göteborg (the second biggest city in Sweden) in Västra Götaland, not somewhere out in Norrland. The fact stands that real estate in the Netherlands is vastly overvalued compared to most of Sweden - although prices in Stockholm and Göteborg and some other cities also have risen to questionable levels.

Why are housing prices going up in countries that are shrinking?

It depends on location.

Finland for example has like 3-5 areas where prices are going up or are stable. In others like dying towns and such housing is sometimes essentially worthless. Or even negative value. Like there are row houses(a special company owned by tenants/individual landlords), can't get loans for needed renovations. Because value of building is less than the renovations cost.

How much new housing is being built there?

I'm from slovenia, former yugoslavia, and the situation here is the same, making it practically impossible for an average couple to buy anything here (and we're worrying about the demographics, lol).

Back in yugoslav times, government built large apartment building complexes, by basically finding an empty field at the end of the city, saying "this is a city, farms should be outside the city, not within it", and building a complex of apartment buildings, and then another, and then a school/kindergarden, and then two or three more. And by complex I mean literally tens of 5+ story apartment buildings. Since it was socialism, those apartments would be rented out to workers by the government.

On the other hand, people who wanted a house (instead of an apartment) could buy a plot of land, and build houses themselves... and i mean literally themselves... some of them would even dig the basement level by themselves, ask friends for help, every friday after work go to a buildng materials store, fill up their car with a few bags of cement and bricks, lay a layer of two down, and then wait for the next weekend. Fascade, insulation, sometimes even the upper floor could wait for better times, while people moved into the ground floor. Dealing with permits and papers was a thing "to deal with later".

Then came independence, the government didn't want to deal with so many apartments and sold them to renters for a price of a mid-range car.

And the current generations? Fucked. Like totally.

A field right next to the roundway around the city? Sure [1]. Next to highrises? Sure [2]. New large apartment complexes? Nope. want to buy a few houses and build a larger apartment building? You better literally be friends with the mayor, since zoning doesn't allow more than two-floor two-apartment buildings. Want to build on an empty field? Nope, zoning doesn't allow it.

People complain we literally need tens of thousands of new apartments, and all that's being built is ~4 "luxury" apartment buildings in relatively shitty locations (but still better than nothing) and every now and then someone gets a blessing from the mayor to build a 6-8 apartment building in a place where an old house once was. ...and then those apartments are bought up for way above what they're worth by people who then rent them out via airbnb.

What if you're magically somehow able to aquire some land where it's allowed to build stuff? Permits and other papers take years. Want to build yourself? Nope, no way. Want friends to help? If they're not licenced contractors and giving out receipts, they're considered as working illegaly and inspections check those things a lot.

Add to this some NIMBYism, where the neigbor complains if you're building a house there, and the situation is even worse.

And public housing? The government built one complex of those, and the build-price was higher than retail price a few years before it was built (like 2800eur/m^2)... because well, government and corruption.

So yeah...

In the end, this is how you get revolutions and terrorism... You're a good worker, save money, save 10k eur in a year (a lot for most), and the apartments you were looking at are 30k more than last year. Why bother? People have nothing left to lose, because the average rent is above average pensions, so without something huge changing soon, a lot of people will be homeless and literally without anything to lose anymore.

[1] https://goo.gl/maps/iL7962VtEzThwgAb8 [2] https://goo.gl/maps/6Do3W3KWXWKpxw1DA

You’re there not alone. Almost no new buildings are being built in Munich. Everything in the city remembers Munich Olympic Games in 1972. Dozen new buildings build yearly are a shy rounding error compared to the real need. Rent of 3 room apartment crawls to 2000€ monthly. That’s roughly a salary of a cashier in supermarket or car mechanic. Buying is for riches only. Building does not work because of zoning despite having plenty empty land in 50 km radius. Potatoes are more important.

2000 Euro sounds pretty good on US salary. I might work remote from Munich and snap that up. You could just convert it to a city of international remote workers or something, no need to have cashiers, bus drivers, and stuff like that in the city.

But why? Why not buy a house in rural USA for much cheaper long-term? Why help raise rent even higher and drive out the locals even more?

It was a joke to illustrate a piece of what's happening.

I find it interesting, that both there and here, literally only a few people need to be removed one way or another, and the housing problem will get a lot better.

(compared to eg. manhattan or some other locations, where there's literally no more place to build, not even up in some areas)

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