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- Hacker News
- Housing is globally unaffordable in the entire industrialized world.
Everybody knows why, but people are desperately looking for scapegoats because the truth is too uncomfortable.
The people to blame can easily be found among your own family and friends. It might even be you yourself. It is probably your parents.
Everybody who works for a living has relatives who have become wealthy by real estate value appreciation. If they're your parents or grandparents, they most probably earn as much yearly from real estate appreciation doing nothing as you do by working full time and being fully taxed for your hard labour.
If they're your uncle and aunt who are still working, then they have a completely different life from a renter working full time, even if it's the same job. Your money as a renter is gone into a black hole, while their money goes into paying off their lucrative real estate or into a very comfortable life if it's already paid off. Unless they are ambitious, they will stay working for whatever salary, keeping salaries from growing. Because they need the stable income. They have no reason to put any effort into a career, since that same effort pays much more being put into real estate.
Outside of the USA any full time working expert in his field can never earn as much per hour in wages in any job as he will earn in real estate value increase by doing home renovations - even if he has no skills in home renovations. Even if he is the leading expert in his field in his nation.
People will look for scapegoats; billionaires, foreign investors, expats. There are dozens of countries with no billionaires, no foreign investments and no rich expats who have a housing crisis. You know that billionaires aren't the problem.
If you have a large percentage of your population who do not work, or who work pretend jobs, or who work real jobs but just at part of their capacity, then it's no surprise that the rest of the population has to work hard to compensate for them. Everything around us is the result of hard work, and if somebody is living comfortably without working that means somebody else is providing for them. Food on their plate doesn't come from the job they worked 30 years ago. It comes from somebody working today. The same for everything.
Until people start admitting what's going on, the problem won't be solved. It's a deliberately created problem by tying the money supply to housing as an effort to decrease the population. Now we're seeing population collapse and total destruction of the industrialized world for the limitless greed of the current old generation. The near future will be very different than what people now are used to. We're already seeing changes and should talk about them instead of pretending and telling lies.
by carlosjobim - Am I the only one who barely knows people who think of making money by buying a house? In my circles, everyone buys a house to live in it and that's it. Same goes with NIMBYS, never met someone saying: "Don't build here because the value of my apartment/house goes down." What I've usually met, it's people who just been lucky because grandpa, grandma, and/or other very old relatives, usually after WW2, bought large plots of land and they build there something and now their younglings are asking incredible sums of money for rent or selling.by cuvert
- Having grown up in Australia I agree with everything you say. The percentage of property parasites as a % of the working population is staggering.
Agree with all except maybe this:
> It's a deliberately created problem by tying the money supply to housing as an effort to decrease the population.
I don’t think there’s a grand evil plan. it’s just people acting selfishly, on selfish incentives. It looks similar around the world because property rights and local planning controls look similar around the world, a huge number of such systems derived from common old Europe roots
by dalyons - > An influx of foreign money during the 2010s drove up housing costs in the areas with the greatest concentrations of purchasers from outside the U.S., finds Caitlin Gorback, assistant professor of finance.
This just in, water is wet.
by rho138 - A friend of mine got a PhD in economics with "building a bridge across the fjord increased property prices on the other side of the fjord".by tasuki
- Housings (US) greatest feature is money laundering: https://globalwitness.org/en/campaigns/corruption-and-money-...
Most countries have residency by investment programs. Invest in real estate, prop up residential home pricing by injection wealthy foreigner/criminal money. Which imo is pretty idiotic.
- esp in the Caribbean.If the FBI wants to find criminals, their short list of suspects should include Caribbean CBI applicants.by bawana
- Congress did improve the situation with the Corporate Transparency Act in 2020, but then Trump became president again and simply announced that the law will no longer be enforced, and now what is left of the Republican party wants to repeal it altogether.
https://newrepublic.com/article/211855/republicans-making-wo...
by the_why_of_y - I would have imagined that an influx of any type of money - not just foreign money - into a market with limited supply growth would push up prices.
Probably I am getting overly sensitive about what seems to be creeping casual xenophobia even in mainstream media. The way the story is presented, the sketchy “foreign” aspect of the money is apparently central to it having this undesirable outcome.
by derriz - The US also drastically stopped constructing new houses after 2008by someperson
- Because they got cheaper for quite a while.
Meanwhile vs Canada (turn on your ad blocker): https://awealthofcommonsense.com/2023/09/the-u-s-housing-mar...
by Scoundreller - A finding that could be twisted by the current administration to support their claim that immigration increases the cost of housing...except its not the type of immigration they want to limit!by dougSF70
- The US has a trade deficit, that means other countries are increasingly holding foreign reserves denominated in USD. To balance the money flow, the US has to sell its capital stock to the countries it is importing from, which includes the housing stock.
Usually this would be welcomed for housing, because e.g. the Chinese are funding local housing construction at ridiculous prices but Americans hate each other so they try to pull up each other's ladder.
by imtringued - All kinds of money:
"Anyone who’s lived in London as long as I have can’t fail to notice that over the last 30 years, the city’s become awash with money. From the mid-90s onwards (the last time property was affordable to anyone on an average salary) shops have got more designer, cars faster, and property commands ever more eye-watering sums. Knightsbridge and Belgravia have become the playground of oligarchs and at the centre of it all — that temple to Mammon — stands Canary Wharf, home to banks, insurance companies and lawyers, gleaming on the London skyline, its shiny windows hiding shady deals.
‘Londongrad’, ‘Moscow-on-Thames’… That Russian money has been given a warm welcome in London is no secret. Over the last two decades, swathes of prime real estate in London and its surroundings have been bought by wealthy Russians looking for a safe haven for their cash, with few or no questions asked. "
https://www.investigate-europe.eu/opinion/londongrad-a-citys...
by leonidasrup - This. And it's not just the Russian oligarchs.
In 2024 a corrupt government was toppled in Bangladesh. In subsequent investigations it was revealed that just one member of the cabinet had bought more than 200 luxury properties across US, UK, and UAE.
The fact that the West welcomes black money from anybody and everybody causes both inflation to go up in the West and exploitation to prevail in less developed countries of the world.
by esalman - True or not, there is little doubt demagogues play on foreign capital when arguing about house ownership costs to the mostly young renting classes.
My own belief is that at national scale the % of foreign capital in housing stock for most western democratic states is low, and when it exists in scale its things like the Canadian teachers pension fund or .. Blackstone.
In America, I suspect it's Blackstone before foreigners.
by ggm - The problem is real estate can not be looked at on a national scale. It is fundamentally local. In a country like the US, probably 95%+ of the land is absolutely worthless as an investment. You can get a residential plot in North Dakota for like $5k. But owning a very small portion of a country can have an extreme influence if it's that part of a country that people seek to live in. Further, the overwhelming majority of real estate in any given area is typically occupied by someone who has no interest in selling soon. Only about 3-4% of US homes are on the market at any given time. If an entity bought up every home on the market in the Bay area, they'd own a measly 0.009% of the US real estate market in terms of housing units, but they would be able to unilaterally set the price of housing for over 2% of the US population and over 4% of the US economy.by jjk166
- Awful headline and I doubt it's what the author would have chosen, given that her comments are much more to do with supply:
> “In San Francisco, demand is reflected in increased prices,” she says. “In Charlotte, demand is reflected in increased quantities.”
> “A big takeaway is that cities are in control of a big portion of their supply sensitivity,” Gorback says. “It’s cities that control zoning. It’s cities that control permitting. The real keeper of the keys are the municipalities.”
by ripley12 - Some 10-15% of San Francisco housing is unoccupied. The exact why and how to fix it are arguable, but I'm doubtful the investment is actually helping.
https://www.pacificresearch.org/time-to-ask-why-so-many-san-...
by kurthr - Here is the abstract of the paper this article is about(Global Capital and Local Assets: House Prices, Quantities, and Elasticities):
“”” We estimate price elasticities of housing supply for U.S. cities by examining the impact of foreign purchases on housing prices and quantities. After other countries introduced foreign-buyer taxes beginning in 2011, both house prices and quantities increased more in locations with high foreign-born populations. A 1% increase in global capital inflows, instrumented with tax policy changes scaled by immigrant exposure, increased prices and quantities by 3% and 0.5%, respectively, over 2011–2018. We combine these estimates to construct new local supply elasticities. Compared to prior estimates, our elasticities are more inelastic and change cities’ relative rankings. “””
So it would seem the focus of the research was very much foreign investment in housing.
by next_xibalba - It's kind of insane that you look at a city like San Francisco that's on a tiny bit of land in a desirable location and they absolutely refuse to build up.
I get that their Victorian houses are pretty, but they're only about a 100 years old and they are now crammed full of people and cars. It's too young of a city to be sycophantically in love with its past self.
by legitster - The US is special insofar as the US stock market is extraordinarily safe with many options for value investing. In much of the rest of the world it's the reverse: domestic stocks are risky and it's real estate, land and gold that are the safe, prestige assets.
When you add in an unstable environment at home, this mentality leads to foreign real estate being perceived as the ultimate asset. It's perception rather than reality because foreign real estate is not exactly a good investment, especially if non-resident: it's illiquid, highly taxed, requires insurance, is easy to confiscate, etc.
by zarzavat