The focus on the wealth side of it is pointless and misplaced. Housing prices are driven by demand, which comes from immigration. There is nothing you can do no the supply side, because the demand is limitless. Cut of all the immigration and foreign buying, and the problem will fix itself in a hurry.
This. The only real solution is to implement policies that make housing prices not appreciate so it's not tempting as an investment in the first place.
Current attempts to fix the problem are doomed to failure because they are trying to avoid 1) significantly increasing the supply of housing and 2) decreasing the value of houses for people who already own them, but those are the things that are actually causing the problem.
Trying to block foreign investors is just a bandaid and it will make no difference. Housing needs to be a depreciating asset.
The housing prices have little to do with immigration and everything to do with nimbyism, bad zoning practices, and indirectly, wealth inequality (which ends up being pressure for a capital biased landlord nimbyism in real estate)
There are many likely reasons for the explosion in housing prices - but we can't pretend that immigration isn't one of them. A solution will likely need to be multi-factored, but reducing demand by reducing immigration will probably have to be part of that solution. To ignore that is to limit how effective your measures in reducing the cost of housing can be.
No matter what we do on the supply side it will be eaten up by the unlimited demand from people coming here. Unless we slow down immigration housing will always be too expensive.
This only further hurts people living here by chasing them out of their homes and taking control of their communities away from them.
We can't solve the problems of every country in the world by destroying our own. That only makes things worse for everyone.
So the population went up by a lot because of immigration. Housing construction didn't keep up with the immigration levels, because of various structural reasons, of which there is only one and that's NIMBYs. And the speculators accrue housing assets and restrict it's supply to the market and then extract rents.
And somehow the NIMBY and speculator coalition override the actual structural change to the housing market, which was artificially low interest rates that financialized the mortgage even more than pre-2009, such that private equity and a bunch of other investment groups dump money into housing and hold it.
So the reason that you can't afford a house is illogical immigration policy, lame NIMBY policies, and wacky interest rate management. Funny, it's rather easy to fix each of these if you have the political will. Alas...
And immigration fixes that housing pressure how? This is no different than queues and backpressure. If housing is too expensive for tens of millions of workers, and supply lags, why would you increase housing demand? You must destroy demand until supply catches up.
1. Eliminate the investor and land lord element from real estate and you reduce a significant reason as to why housing is so expensive. Do it with taxes, codes, whatever. You can own two houses and any more than that the taxes go way up. Landlords don't build houses, developers who sell their new builds do.
2. Eliminate foreign ownership of American real estate and limit it to American citizens and legal immigrants. -> see Thailand
3. Unpopular but true: eliminate the influx of illegal immigrants and remove the ones already present. More people + limited stock = high prices
The issue is not supply and demand for houses - there are plenty enough to go around (though often in the wrong place).
The issue is that a sizeable underclass is being created that have no wealth, not least because what wealth they did have has been funnelled to the very wealthy. For example, medical bills. For example student loans. For example zero interest rates with zero wage inflation meaning accommodation costs don't fall as a proportion of income.
The solution is to address wealth inequality. This means taking wealth away from those who have amassed too much, and returning it to those who had it stolen from them.
Supply and demand still works. That is a confounding factor artificially increasing demand (or decreasing supply). There are lots of approaches to fight this, including banning foreign ownership, or just building so much housing that it doesn't matter (the foreign ownership problem may also go away in the latter case if it turns into a poor investment).
Its really not a step in the right direction. Imo its even a bit into the wrong direction because they are opting to sidestep the vastly easier step that would actually solve this problem for good: updating the zoning to keep up with job growth. Blaming foreign investors for today's home prices is like blaming the boogyman, because its zoning that explains everything about today's home prices and its the zoning creating a supply crisis that attracts investors in the first place (foreign and domestic lest we think this investor problem poofs into thin air with this).
Housing is the crux of this problem and is an issue so intractable, I genuinely don't see a solution. The way the housing market across much of the western world is the way that now is, is because rich people made it that way, and they have all the influence, power and control now, so nothing us small folk can do will likely change things in any meaningful way.
Housing has become a commodity, an investment, and so the rich, with their sloshing, frothing waves of cash, are buying it up at an ever accelerating pace. Not buying it up so they can live in these homes mind you, but buying it up so they can extract rent, extract PROFIT from homes that are meant for people and families to live in. So now, rather than serving as a place for people to live, housing is serving as investment for the rich to get ever richer from.
The real problem is that when it comes to housing, the marginal buyer is now some hyper-leveraged corporation with near limitless access to cheap capital, or some billionaire investor, who'll happily bid 50% over asking as they're planning on renting the house out for the maximum amount possible and bundling their "Assets" into a REIT, and so they'll gladly pay over asking as its just a cost of doing business.
So now you've got the rich through their companies and trusts buying up entire neighborhoods, out-bidding regular folks for homes, raising rents to increase profits, and turning homes that people could once have lived in, into vacation properties and short-term rentals or worst of all letting them sit empty just so they can sell them when the value goes up.
Increasing wages is one absolutely necessary step towards fixing the economy, but real wages would have to rise 100%, 500%, a even f*king 1000% in a lot of places for regular folks to actually be able to afford the kinds of homes that a family could once have afforded on a single middle class income.
So literally the only thing that can fix things is to make housing worth a lot less. But that will never happen because that would cause some already fantastically wealthy people to be a little less wealthy, and the rich would rather people die and go homeless than ever be less rich.
The vast majority of houses are not going to foreigners or corporations. Some do, but it is only a tiny percentage. We need to build more housing, in the end housing costs are about supply and demand.
It hasn't solved the problem of affordability. Rent and condo and house prices are some the highest in the world. You end up just building housing for foreign investors to make money off the locals.
In fact you could argue that if foreign investors have bought all your available housing then by building more housing you solve the problem of affordable housing and devalue the housing sold to others (but you got the income at the previous level).
Here in the UK we need a massive concerted national effort to replace both the sold housing stock and the demand from an increased population - not going to happen though as neither major party is looking to be responsible for a house price fall (however beneficial in a net sense that would be) as the newspapers/media will beat them over the head with it.
So we continue the wealth transfer from the poor/young to the rich/old.
I almost agree, but I think you've got the causality backwards.
> The end result is we have collectively refused to build enough housing to keep prices stable or decreasing
This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. As so often, it comes down to basic microeconomics: If you limit supply while demand rises, prices will constantly go up.
I do agree that foreigners, like anyone else, buy homes as speculation because they're guaranteed to increase in value.
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