Even if the bureaucracy is the worst offender, every foreigner buying a house still results in 1 less house for Spaniards.
Sure, fix bureaucracy, but don't pretend foreign purchases have zero effect.
In a very limited scope, sure. What that foreign capital also does is lower risk and thus capital costs for development and improvement. (In the event of a limited crisis, for lenders as well.) Whether the net effect goes one way or another is more complicated than what you describe.
Put another way, if foreigners could only buy unbuilt units, would you still say they're resulting in fewer houses for Spaniards? Do the countries shunned by foreign investors have affordable housing?
If they do build something, it is office buildings for investment that take up space and often remain empty (Chinese are good at that). These investments still take up space and drive up real estate prices.
Where do you even live?
Source? (I'm generally hugely sceptical of uniform statements about how capital behaves across the EU, let alone Europe.)
If it was really true then why would you have so much trouble providing anything at all that would back it up?
Not a theoretical argument. An assertion.
Yes, they make real estate investments in luxury and high-end sector, some of which boarded up for decades.
It's not like your average working class citizen is on the house for a manor house in the city center.
These are not the same markets.
Exactly, and to further drive the point home the real estate investments driven by foreign investment are targeting entirely different markets, such as luxury homes and tourism, whereas the complains about lack of access to housing come from those who already struggle to buy the cheapest units in working class suburbs, where the foreign investments are clearly not being made.
So the question you should be asking is how come you're not seeing investments in affordable housing across the country at a time where you see foreign investment in luxury and tourist areas. Then you'd realize that you're discussing two entirely different things that bear no relationship.
But this can happen whether people from outside buy it or not. As long as there is demand for tourism, and some countries are richer than others, this will happen.
Say they instead keep values artificially low so an EU resident can buy a property for cheap, and it stays cheap. What's the benefit?
All the hypotheses claiming that "the market pressure will improve things for all" have been proven false at this point. We have decades of data, and this is only widening the inequality gap.
Btw, was your 40% increased house purchased 20 years ago? If so, that's effectively a loss, and I'm not even sure about the one that doubled. 5-10 years would be different.
Can they? I mean, what is your plan to lower current housing prices? Cut off demand from foreigners with purchasing power and instead replace it with demand from people who cannot afford a home? They are not even the same housing market, are they?
Besides, if foreigners are investing solely to speculate - if they did fix the supply constraints, the opportunity for speculation would greatly decrease. It's only an attractive investment because the supply is so finite.
[1] https://www.katrinaandtheteam.com/blog/vancouver-bc-economy/
https://vancouversun.com/news/survey-finds-half-of-metro-van...
I can sympathize with it because I live in Toronto and am also thinking about leaving. Do I hate immigrants, no there aren't actually that many immigrants in the city core where I live. But certaintly there is an affordability crsis that has gripped the city and the country and wages seemed to be supressed and there seems to be less job opportunities (likely due to all that extra labour coming in)
The house bidding was originally won by someone abroad. They overbid the house by a lot. However, because of the KYC laws, that person needed to proof their income is legitimate, which they couldn’t. Therefore, we got the house.
Building new houses costs 10 years in my country. So building new houses is not fast enough to create new affordable houses.
Seems like an argument for internal visas like China's household registration system to prevent excessive migration to the cities.
The countryside is mostly emptying out so no need to prevent people moving or buying there.
With the big difference being the Chinese citizen being denied Beijing hukou is still a Chinese citizen. Madrid should properly first concern itself with Spaniards' wellbeing. (This isn't an argument for or against this policy. Just clarifying why restricting non-EU home purchases is different from hukou.)
However we live in a world where that isn't the case so a nation deciding to restrict immigration or economic activity by foreigners for the benefit of the domestic population is an acceptable position to take -- provided it actually have that desired outcome.
Liberalizing zoning and taxing land would do more to improve housing affordability.
Absolutely not. For example my impression is that foreign demand has been great for the construction industry, both small and large, both in Spain and Portugal. Paying lots of people directly and still more indirectly. The presence of all these buildings that needed renovation (or demolition) shows that the population previously could not afford to use them. Dumping money in the economy causes some inflation, yes, but it also pays many people and allows still more to enter the field.
Foreign investors rub salt in the wound by moving their gains outside the country. And the real risk that they will flee when there is any sort of downturn making it worse.
My opinion giving those guys the middle finger isn't unreasonable.
Of course, full deregulation is not a fix as seen with the condos built in ridiculous locations back in the sub-prime mania.
It would be good to have a reasonable plan. Sadly the plans for making livable neighborhoods was hijacked by the "15 minute city" WEF-style politicians. The Netherlands had some very interesting projects that went pretty well.
Just to be pedantic, it's not about foreigners buying property, it is about non-resident buying properties.
A foreigner that actually resides in Spain would not be taxed, if I understand correctly.
I don't think that limiting property ownership to residents is a bad thing. I do think, however, that it will not have that much impact in the properties the average people actually need and want.
Even if it's just short term rentals, that means more affordable vacations and temporary housing for the domestic population.
This is bound to push housing prices up.
Hitting foreign investors is easier politically but may not have much effect.
While a unit sold does immediately reduce the supply by 1 unit, new demand and foreign funds can also stimulate more building and, especially important, can prevent areas falling into disrepair and becoming ghost towns. It really depends on the specific area and situation. My 2c.
For example, let's assume renovations are 100% completed by local crews. Any crew working for a foreigner is working for them because A) the foreigner is paying more than a local for the work B) the foreigner is paying enough to make a profit and the local isn't (which is a subset of A). There is no situation in which adding foreign money results in more houses for locals. If you eliminate the ability for foreigners to renovate, the renovation crews will take the money that the locals can pay. There will be fewer renovation crews, because some crew will not be profitable at the lower rate, but more crews working to renovate houses for Spaniards.
Similarly, for materials, given supply and demand curves (and assuming that the marginal units added won't cause economies of scale) eliminating the ability for foreigners to buy materials for renovations will move the curve intersection down to a lower price and volume.
Assuming fixed supply, yes, it's (probably) a zero-sum game.
> eliminating the ability for foreigners to buy materials for renovations will move the curve intersection down to a lower price and volume
Assuming a frictionless market and no economies of scale, yes. In reality, you'll have a smaller set of options for locals at a slightly (but not dramatically) lower price. (Again, for an example look at all the markets foreign investors shun.)
> will be fewer renovation crews, because some crew will not be profitable at the lower rate, but more crews working to renovate houses for Spaniards
You absolutely cannot conclude this from first principles.
You make valid points. They just need to be followed up with data. The systems you're talking about are too sensitive to generalise like this.
edit: downvoters, I'm not actually endorsing blaming migrants. It's only used as an example.
If so, then sure, you can blame every criminal for x% of every crime, I guess.
>Even if the bureaucracy is the worst offender, every foreigner buying a house still results in 1 less house for Spaniards.
It's pretty clear that supply and demand isn't a consideration here, and the commenter is strictly focusing on the aspect that one house is being removed from the housing supply.
But that assumes you do not count the person who commit the crime as part of the population count.
In this example, “crime per capita” goes down if they commit crime below the average crime rate of population before they joined that population.
Sorry, meant to say "crime count", or more precisely, "native victimization count". Natavists by definition prioritize the native population over immigrants, so if some native got victimized by a migrant, I doubt a natavist would be convinced by "well actually, even though there was one extra crime committed by a migrant, there's also 10,000 (or whatever) more people, so the crime rate actually went down!"