I am anxiously following the real estate market and prices are far outpacing the wage growth, making real estate really unaffordable for a lot of people, and yet there is very little political will from politicians to do anything about it.
This is especially true for desirable areas and big cities, and slowly pushing low earners to the outskirts and even outside towns. I know plenty of people who hoarded multiple properties and now they simply rent them through Airbnb or booking not to mention big corporations trying to snap even more and rent them at outrageous prices. While plenty of people cannot afford even rent in those cities.
Mind you I am not US based, but I know that this is pretty much a world phenomenon for quite a few years who got really accelerated by the COVID pandemic, but its effect will cripple future generations severely who will never be able to purchase their own roof over their head and they will forever be stuck with ever increasing rents increasing enormously the financial burden of those people.
I don’t know for you but I believe this is completely unsustainable in the long term and this will become an even bigger problem in the future and I wonder why there is so little done to tackle the problem now, and what are those politicians hope, that this will magically disappear tomorrow and all will be roses?
Why aren’t universally some laws against home flipping and people owning more than one residential property? I think the right of having a roof over your head is a basic human right and every person out there deserves to have a decent home and not be forced to live on the street.
Giving first time home buyer’s assistance just juices demand which would just lead to further increased housing prices.
The supply side is what needs to be addressed, that’s a lot harder though as builders would prefer to build luxury housing as opposed to starter homes.
I am of the opinion that most “supply” issues are due to investors. Except in certain geographic areas we do not have a shortage of actual physical housing. What we have is a shortage of available housing at a mixed pricepoints for purchase.
All housing that investors purchase for rentals removes it from the supply.
Traditionally investors have sought out entry level housing for rent. They invest in building rental complexes. They make all cash purchases and then rent it out to people who otherwise would have been first-time homebuyers. Investors used to be the low end offer. Blatant price fixing has increased rent outrageously. Now investors are the high end offer and removing supply constantly.
With AirB&B, the middle and even upper range market that traditionally has had less investor competition is now a major target. This has led to price wars for investment purposes on previously safe segments.
The first solution to the housing supply is simple: taxing income from rent so that selling the property is financially more lucrative. It will have to include a prohibition against rental increases to cover the taxes as well.
The second is to mandate zoning and new construction to match the market needs not the needs of the investors.
Last would be to create a program where builders who focus on entry level housing receive incentives from governments (also include hefty penalty for substandard construction).
Well said, while I think there a probably caveats (that I don’t have the energy to debate since I mostly agree with you anyway) to each of your solutions, it’s definitely a good starting place to address the underlying issues with the housing market for single family homes
Yeah ive seen this happen. After €15k grant was introduced, all house prices went up by that much. At least 1st time buyers are at an advantage in this case, over those who already have a home.