Real Estate will stop being a free money machine when the government stops artificially restricting housing supply with single-use, single-family zoning.
The investor class is simply insatiable and you can't just satisfy the demand because it's always growing beyond all reason.
You need to curb investors interest in real estate.
So basically ban buying residential real estate on credit. That's a start.
It would have interesting sideffects. One of them would showing clearly to the masses how unaffordable houses actually already are. Unfortunately rents would go up in the short term from increased demand from people who'd otherwise get a loan. So the rich people would keep buying them raising the prices till the new equilibrium is reached.
Eventually rents would settle at how much people who rent can pay without starving and house prices would settle at whatever's the price of whatever asset that yields similar returns.
I don't think it would be at 10% of today's prices
People's idea of what is appropriate housing have changed.
A land value tax that ignores the value of improvements on the land would make a dent. Freeloaders who buy a lot just to sell it later would see their gains evaporate. So land holders would seek to actually improve their land.
Currently another big driver of land value is zoning. But it isn't the only one. And until society starts degrading hard, the other drivers aren't going to slow down either. maybe with an exception for suburbia where the roads will need replacement even though the area doesn't raise enough tax revenue to pay for the replacement roads.
The power is simply way too skewed in favor of gigantic companies with coffers that are infinitely deep when you compare them to any individual looking for housing. They can buy dozens of building at a time and completely eek out individuals looking for a home for themselves and their families, and what can anyone do about it?
Imo corporations should be legally barred from owning residential property of any kind, and there should be limits to what an individual can own for themselves as well, be it at the neighbourhood/district/city/state/country level. The overwhelmingly large majority of people need no more than a single home, the only people this kind of rule would affect negatively are the ones that aren't struggling in the first place.
Are you aware that the government is the entity preventing housing from being built in many cities?
I don't think zoning should be abolished or anything but clearly the regulations the US has now, at least, are incorrect and restrict supply far too much.
[1] https://www.faegredrinker.com/en/insights/publications/2024/...
In many cases the ownership has been traced to government funding. The suspicion is that these are just the tip of the iceberg.
So, at least in the eyes of the US Congress, based on some damning evidence, China is doing something to the US.
That said, "black money" is also a problem. But I suspect that's the case in China as well. There's no way to eliminate all corruption, even in China.
At least in regards to the US, no one can really know that. The Chinese government technically doesn't own anything in the US anymore. The alarm is being raised because supposedly private Chinese enterprise includes ownership of significant American food production (e.g. largest pork manufacturer), farm land, homes near military facilities, etc. Those are strategically sound holdings for national defense in both countries. Suburbs are built on farm land, etc. It's very difficult to decouple real estate from national defense, really.
That said, "Chinese people" don't own all that much in the US overall when compared with other countries. China is being singled out because they have been caught spying repeatedly. They stood and burned their embassy and refused to allow firefighters in. There is military posturing. They are invading American airspace over the US mainland. All these combined paint such purchases in a suspicious light at the very least.
There's enough evidence to know that the Chinese government is funding at least some of the purchases. It could be most of these purchases. No one can know for sure, not even the individual buyers themselves. Only the Chinese government knows.
I think the same applies in Europe?
You know if they did things by the books the rent will increase? (probably by 20-30%)
On the contrary, the skyrocketing homelessness rates around the country are showing that demand for housing is more elastic than people thought.