As long as corporations can make a profit (low enough interest rate, high enough rent), they will continue buying the properties. It may be difficult to build fast enough to overwhelm their ability to buy, and in a large number of areas, the market isn't anywhere near saturated.
With them holding the property, they push prices up for buying, which forces people into renting. It's a vicious cycle that just encourages them to buy more property. At some point the whole market may collapse, but hell, they may get a bailout.
Wouldn’t it mostly discourage people from buying properties for the only purpose of renting them? I think the long-term effects will be interesting. Hopefully, a bunch of rental properties will hit the market.
Nope, they’ll just sell them off to large investment firms that are flush with funds after the long period of low interests rates. They intend to keep everyone renting forever so that the whole scheme can be packaged and sold as an asset class.
I suspect the current property owning class will keep buying it up as investments and land banking, and bidding up the price as they go. The only way they could be as high as they are is as ‘investments’ where the purchaser either had capital or is anticipating selling before their loan reverts from interest only.
Holding cash is a losing strategy long term, plenty of money has already gone into real-estate. They can't expatriate their money, where else is it gonna go?
The money to be made on a property is peanuts to traders. They’d have to buy blocks, but then they are real estate developers and that’s a different game. Most of the edge will be in marketing and negotiation for a property development rather than buy and hold for 10 years hoping the poor people get priced out because there is decent pressed coffee sold from a bicycle friendly hip cafe with exposed brick walls.
I mean... it has to eventually. If my country has a population of 50 million and I build 800 million homes, will investors keep buying them all at above market rates (read: more than I spent building them)? Then I can build 100 million more and keep collecting infinite money?
No, in short term people hoarding apartments will be happy to buy whatever amount of new property built. Probably it will hit people 2, 3 apartments, but not ones with 20+ ones.
If you really where those people, it would be too much of a burden and hassle to have to deal with it as an investment property. They just don't want to deal with booking hotel rooms, the hassles. They can store whatever and know that it will remain untouched, they can fly into town and have an affair and leave, and best of all, it's prime real estate that figure will stay in high demand for the foreseeable future.
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