Housing doesn't follow the simplistic supply/demand model. What happens in a lot of places here in Europe during the past 10+ years of low interest rates: developers + investors buy land and buildings to develop them, either chopping up older larger apartments into smaller units or building new housing but they don't sell all of them at once after developing. They hold onto units and drip-feed the market to keep prices high, the lost opportunity cost of selling earlier is offset by selling later at the inflated price.
I bring up low interest rates because getting a larger amount for a mortgage is cheaper, buyers will go to banks to check what's the largest mortgage they can get to fit into their budget to then go shopping for a house, so the prices are directly correlated to how much credit you're able to get, pushing prices upwards which the investors/developers can scoop up.
Now prices are extremely high, mortgages aren't so easy to get and we see prices going down (here in Sweden there's been a 10-20% fall), but they are still much, much higher than 10-15 years ago. It's pushed people like me, with a decent salary but no family wealth whatsoever to be basically priced out of the market. I'd need to save about 20-30% of my net salary every month for about 2-3 years to afford just the down payment for a small apartment on the outskirts of the city. I'm not able to do that while my parents depend on me and I still have rent to pay.
>Housing doesn't follow the simplistic supply/demand model
Yes it does, and I'm tired of pretending that it doesn't.
If I want to build a house in Portugal, if I am even allowed to do so, I will have to spend about half of the cost to the government.
From VAT, to real estate tax, to licensing fees, etc... That's a significant portion of the cash spent going directly to the state for no actual practical reason.
And that's not even mentioning the time spent dealing with all that, or the fact that housing is essentially banned in the majority of the country.
My family has been in real estate for generations, and Ive listened to multiple generations on both sides of the family for years struggle with these politically inflicted issues.
There is no housing crisis.
There is a political choice to make housing unaffordable and unbuildable. Anything that doesn't address that issue will only make things worse.
>Yes it does, and I'm tired of pretending that it doesn't.
It doesn't, because the housing market is not the "free" market like the one for commodities, but is an asset heavily manipulated by government, banks, NIBYs and institutional investors to maintain a steady increase in value of their investments above inflation, and incidentally above wage growth. The bigger the growth of their investments, the better for them.
It really, really is that simple and anyone making the argument that it isn't either hasn't thought this through, has never actually looked at the data, or is outright maliciously lying about it.
A Twitter chart vs the arguments of people working with research in housing departments in some of the largest cities in the world. I guess I know what source I'll actually trust a bit more.
For a lot of these places there are enough houses for the people who want to live there. Or it's a whole hell of a lot closer. The issue is there's not enough houses for the people who want to live there and all the tourists who feel entitled to be able to stay in a house on their vacation. A house that takes away from locals, and destroys any culture of the neighbourhood.
There are close to enough for the locals. The problem is when tourists feel entitled to houses, like I said. Stick them on the periphery, and let the locals actually live where they work. Instead, we're doing the opposite, and destroying cities and neighbourhoods and pricing out locals in the process.
> What right do you have over the property of others?
I suspect this is where we're going to inherently disagree. People don't own their property in a vacuum, nor do they (nor should they) have unlimited 'rights' to do what they want with it. We don't let people dump toxic waste or oil on their properties for good reasons, and I think extending this to short-term lets is perfectly sensible due to the overwhelmingly negative benefit it has on residents. Doubly so when its corporate landlords in question doing it.
The cities that built 1000 times more houses are actually more expensive. Does anyone think that Manhattan-like density in San Francisco is going to lead to Houston prices?
Low interest rates also mean it’s practical to hold real estate and drip-feed the units. Much harder to do when you’re paying 10% interest on a construction loan.
I bring up low interest rates because getting a larger amount for a mortgage is cheaper, buyers will go to banks to check what's the largest mortgage they can get to fit into their budget to then go shopping for a house, so the prices are directly correlated to how much credit you're able to get, pushing prices upwards which the investors/developers can scoop up.
Now prices are extremely high, mortgages aren't so easy to get and we see prices going down (here in Sweden there's been a 10-20% fall), but they are still much, much higher than 10-15 years ago. It's pushed people like me, with a decent salary but no family wealth whatsoever to be basically priced out of the market. I'd need to save about 20-30% of my net salary every month for about 2-3 years to afford just the down payment for a small apartment on the outskirts of the city. I'm not able to do that while my parents depend on me and I still have rent to pay.