Priced out of home ownership

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn&#x27;t the main cause of this problem.<p>Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause?<p>In my view this is symptomatic of a more fundamental issue - global asset price inflation driven by a broken financial system (i.e. a system being artificially pumped up with cheap credit). Housing is just where the rubber hits the road and regular lives are directly effected. Just look at the tight correlation between the increase in the money supply and property prices.<p>For those who insist that the number of properties is inadequate, take a look at the numbers for each of the countries I mentioned in the first chart here: <a href="https:&#x2F;&#x2F;www.oecd.org&#x2F;els&#x2F;family&#x2F;HM1-1-Housing-stock-and-construction.pdf" rel="nofollow">https:&#x2F;&#x2F;www.oecd.org&#x2F;els&#x2F;family&#x2F;HM1-1-Housing-stock-and-cons...</a> (Total number of dwellings per thousand inhabitants, 2022 and 2011).<p>This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence.<p>Cheap credit causes an increase in demand. This is not demand for homes but additional &#x27;artificial&#x27; demand for properties as investments. Think short term rentals, second homes, land banked properties, etc. By definition, only investment properties can be underutilised - owner occupied homes are occupied! So in an environment that encourages property investment you will see more underutilisation.<p>What will cause prices to fall is higher interest rates. This is what has been happening in NZ.

I live in Portugal and here the situation is outright ridiculous.<p>1. There are a ridiculous amount of abandoned properties, when I walk the streets of major cities, sometimes more than half of the buildings even in expensive areas are boarded-up.<p>2. Meanwhile I am afraid of being homeless soon, I lost my job recently, and the unemployment benefit I can receive is literally half of my rent. Thing is, there is no &quot;worse but cheaper&quot; place to move to. I already live in a &quot;0&quot; apartment, with the &quot;0&quot; referring to the number of rooms. The apartment is literally just an empty square with kitchen sink and bathroom stuff. I don&#x27;t even have my workstation anymore because literally there is no physical place for it inside the apartment.<p>People are like: &quot;Build more homes&quot;. Yet the amount of abandoned properties (by the way, this also include abandoned farmland! Government is upset that there are tons of that, and the result is land with zero management, with wildfires, poachers, drug traffickers...) is greater than the number of families needing.

The problem is lack of supply vs demand. In 2022,England and Wales:<p>- built 254000 homes[0]<p>- had 745,000 people immigrate (net)[1]<p>- had 600000 people turn 21[2]<p>- had 577160 people die[3]<p>If you gain a load of people, far more than you increased dwellings for, prices will go up and dwelling size will go down. It&#x27;s not particularly complicated.<p>[0] <a href="https:&#x2F;&#x2F;www.savills.co.uk&#x2F;research_articles&#x2F;229130&#x2F;357082-0" rel="nofollow">https:&#x2F;&#x2F;www.savills.co.uk&#x2F;research_articles&#x2F;229130&#x2F;357082-0</a><p>[1] <a href="https:&#x2F;&#x2F;www.bbc.co.uk&#x2F;news&#x2F;uk-politics-67612106" rel="nofollow">https:&#x2F;&#x2F;www.bbc.co.uk&#x2F;news&#x2F;uk-politics-67612106</a><p>[2] <a href="https:&#x2F;&#x2F;www.ons.gov.uk&#x2F;peoplepopulationandcommunity&#x2F;birthsdeathsandmarriages&#x2F;livebirths&#x2F;datasets&#x2F;birthsummarytables" rel="nofollow">https:&#x2F;&#x2F;www.ons.gov.uk&#x2F;peoplepopulationandcommunity&#x2F;birthsde...</a><p>[3] <a href="https:&#x2F;&#x2F;www.ons.gov.uk&#x2F;peoplepopulationandcommunity&#x2F;birthsdeathsandmarriages&#x2F;deaths&#x2F;bulletins&#x2F;deathsregistrationsummarytables&#x2F;2022" rel="nofollow">https:&#x2F;&#x2F;www.ons.gov.uk&#x2F;peoplepopulationandcommunity&#x2F;birthsde...</a>

Stop subsidizing demand at the national level. Stop restricting supply at the local level.

I bought in 2022, and while it was new construction, it&#x27;s a pretty mid-range house. No premium finishes, in a growing but small city northwest of Houston.<p>If you told me 10 years ago how much I paid for it, I&#x27;d ask what the name of my butler is.

To efficiently live in cities, many large public works have historically been completed, for example:<p>- Cities across the world built thorough sewage systems, preventing the need for private citizens to empty their litter buckets out the window – a large river in Chicago was even reversed!<p>- Cities across the world built mass transit networks, enabling citizens to move around efficiently without relying solely on private vehicles.<p>- Cities across the world should build affordable housing networks, as Vienna did. This way, citizens don&#x27;t have to fall victim to the exploitation of speculators and distortions of the supposedly fair market.<p>Public affordable housing is a necessary infrastructure, just like sewers and transit, to create livable cities for all residents.

The UK made renting property a lot less lucrative a few years ago. Something about the tax position of letting mortgaged property. That meant landlords sold their houses - which I believe was broadly the point - and thus there are fewer places to rent and the cost of renting has increased to the new point of stability.<p>I think this probably has decreased house prices to some extent, but people are really insanely reluctant to sell a house for less than they bought it for so lots will wait for years before accepting the change.<p>It&#x27;s probably good times to be buying an ex-rental to live in and getting better as mortgage rates fall.

First of all, agreed that housing prices are insane, even two-income households struggle to buy in my city.<p>But taking a more long-term view, in the US the owner-occupied housing rate about 65%, which has not changed a ton in the last 50-60 years (high was 69% in 2005 and low was 63% in 1965). Granted the market has changed a lot, we have much bigger houses, and more two-income families to pay for those more expensive houses.<p><a href="https:&#x2F;&#x2F;www.advisorperspectives.com&#x2F;dshort&#x2F;updates&#x2F;2024&#x2F;04&#x2F;30&#x2F;home-ownership-rate-q1-2024#:~:text=The%20Census%20Bureau%20released%20its,lowest%20rate%20in%20two%20years" rel="nofollow">https:&#x2F;&#x2F;www.advisorperspectives.com&#x2F;dshort&#x2F;updates&#x2F;2024&#x2F;04&#x2F;3...</a>.

I think it is a mistake to write an entire article without talking about supply and demand. Demographics are one of the lest surprising things in statistics, they can sometimes be predicted decades out from an effect arriving. Housing construction is similarly easy to observe.<p>I&#x27;d personally bet that there is a gentle imbalance appearing between how much energy the average person can lay claim to vs. how much they need to build and service a house and this is a symptom of the energy squeeze. But it might not be and this article isn&#x27;t doing much to prove or disprove what the actual problems are because we need more information to make useful observations.

I am not an economist but if we would treat house ownership something that is beneficial for the whole society (less traffic from commuters, less homeless etc) and remove the speculations&#x2F;foreign investments around housing?<p>Why not apply the following: - every house not used for primary living place is highly taxed (removing all speculative ownership) - charge foreign investors heavily (australia will do this soon) - tax reduction for renting places for lower than median per square meter price - incentivising affordable homes<p>Just trying to understand why this wouldn’t work?

I find it a bit strange that the article (and also a lot of the discussion here) does not discuss the size of these houses (in square meters per person), or alternatively the distribution of the sizes&#x2F;areas.<p>I grew up in a 20 square meter per person apartment (with multiple person living there, for a total size of 60 square meters) - and it was definitely not pleasant. But I feel that nowadays people also expect a lot - for example in The Netherlands the reported average of 65 square meter per person <a href="https:&#x2F;&#x2F;longreads.cbs.nl&#x2F;trends19-eng&#x2F;economy&#x2F;figures&#x2F;construction-and-housing&#x2F;" rel="nofollow">https:&#x2F;&#x2F;longreads.cbs.nl&#x2F;trends19-eng&#x2F;economy&#x2F;figures&#x2F;constr...</a>.<p>Not discussing what it should be ideal, but if (some) people now want 2x or 3x what they wanted 40 years ago for example (without actually needing it due to a larger family), it&#x27;s no wonder that there are issues (with prices&#x2F;availability etc.).

I don’t get articles like this. It’s arguably a better financial decision to NOT buy a home, and park your downpayment in a broad based index fund. I get that there are arguments for or against, but there doesn’t seem to be a clear financial advantage to home ownership. So, what’s the big fuss about? Just pay rent and carry on? Surely, there are better things to focus on?

Why doesn&#x27;t the government build and sell housing at a small profit? Here in Dubai, the largest housing construction companies are or were government owned. It&#x27;s one of the ways the government can have zero income tax despite oil being less than 1% of its economy.<p>My only thought is that it&#x27;s political, and some voters don&#x27;t want their houses to lose value.

The housing market has gone through several booms and busts in the U.S. I&#x27;ll restrict to U.S. viewpoint since it&#x27;s the only country I am educated on this topic. In every single case, the root cause was unchecked financial speculation.<p>The most major busts by year:<p>1837 - caused by land speculation, driven by the gold rush<p>1873 - caused by land speculation, driven by railroad companies and their investors<p>1929 - caused by a stock market bubble<p>2008 - caused by widespread mortgage fraud and speculation on the housing market

Where possible, states should build more tiny house communities, or have land where putting up a tiny house is legal and pain-free. There should also be a law prohibiting a person from owning more than one of them, except for temporary periods of moving out of one and into another. (The same should hold for regular houses, too.) Effectively, land is a different sort of commodity than most others: it is truly finite, and people should not be able to make as much money off it as an investment as they currently do.

Given how abundant land is, does it imply that supply shortages are purely man-made? (e.g. policies not allowing large swaths of land to be built on).<p>Otherwise it doesn&#x27;t make sense that prices are high for a good (housing) whose primary input (land) is in great supply.

U.K. view here... and I&#x27;d guess this applies the the majority of the world too.<p>I was born in, grew up in and currently live in a location that the HN community never even thinks about. Most people in here have no idea of how the regular 99% live and then base their whole world view on expensive capital cities and hold the strangest views of housing.<p>I bought my current house in the 2010s, my mortgage is still half the price of renting and I could manage to pay for everything by myself even if I were on a minimum wage. The problem isn&#x27;t anything to do with housing it&#x27;s to do with your own warped view on the world.<p>I don&#x27;t say this to be contrarian or to necessarily make a point. I want you to look up the minimum wage of your country and think about how literally everyone else happily lives without thinking twice about these things. You all live a massively privileged life yet these things concern you more than they should.

None of the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies — will lower costs. Every one of them will raise prices. You can only fix this with supply: build homes.

A utopic solution would be to learn, at last, how to have a thriving economy <i>without</i> increasing megalopolis.<p>Housing prices are unaffordable in big cities, while abandoned properties are rotting in the countryside everywhere. It&#x27;s time we start spreading the economy rather than concentrating the people.

Starting to sound like a broken record but land value tax + up zoning was the fix for this 100 years ago, and it still is today...

all housing posts on HN can be summarized with this without reading any of the comments<p>all housing posts have the following discussions 1. housing shouldn&#x27;t be an investment<p>2. &#x27;local democracy&#x27; always turns into nimby<p>3. something about gentrification<p>4. something about govt incentives&#x2F;disincentives: don&#x27;t give tax breaks for homeowners, tax second home ownership ect .<p>5. something about airbnb<p>6. some comparisons with europe&#x2F;denmark<p>pls let me know if i need to add anything to list<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40286434">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40286434</a>

My wife and I bought our first house in 2018 and it feels like we jumped on the train a minute before departure, right before it took off like a rocket.<p>Most of our friends are still running along the platform, desperately trying to grab on but the train just keeps accelerating.<p>Our first home price increased by 50% in 4 years when we sold and moved into a bigger home in 2022, and we hardly did anything to it. Just the way the market is. The only reason we were able to afford the new house is because of the rapid gains on our first house and the fact that we had a ~2% interest rate for two years that allowed us to quickly build up a savings nest egg, with a mortgage payment that was far below what our friends paid in rent.<p>I just feel bad for all my fellow millennials that couldn&#x27;t catch the train before the market went fucking insane in 2020. Because it really does feel like catching up is impossible if you aren&#x27;t already in the game.

Society in UK, USA, AUS,Canada has been destroyed by housing as a financial instrument instead of……. housing.<p>And politicians love every dollar of price increase.<p>There’s the homeowners and the renters&#x2F;serfs and nothing in between.<p>Dead society, nothing to aim for or live for.

Some other less-cited reasons home ownership may increasingly be considered expensive:<p>- Increasing density in older cities requires infrastructure upgrades that are much more complex and expensive to retrofit than it was to plan and build the first time when space was abundant.<p>- Multi-story buildings are more expensive per floor space area than single-story buildings. As cities become denser, the added expense of multi-story buildings is realised.<p>- Home standards have dramatically increased. We&#x27;ve forgotten how common it used to be for houses to leak during storms, or how hot or cold houses used to be without any insulation or HVAC systems. We&#x27;ve forgotten flash floods caused by inadequate stormwater systems. Where children used to grow up in bunk beds in tiny shared bedrooms, they now are expected to have their own adult-sized room. Where a small kitchen used to suffice, people now expect a huge show kitchen and butlers pantry that is double the size of old smaller kitchens. Or in a country such as China, millions of people have forgotten what living in a cave house was like for their grandparents.<p>- Complexity of expected amenities and public services have dramatically increased, resulting in people wanting to live inside large cities rather than spread out across small towns. People want to live within an hour of travel to a MRI machine and healthcare specialists. Or instead of shopping at one food store or dining out in one of two restaurants in a small town, people want to be within a few minutes of 20 choices of cuisine in a large city.<p>- Materials are more expensive because it has been realised that clear-felling old growth forest is not sustainable, nor is digging up the easiest to extract resources, and we&#x27;re just starting to realise how expensive sustainable resource extraction actually is. As a result of increased quality of housing and infrastructure, materials are enormously more complex and varied.<p>- Safety standards for construction labour are significantly improved, even if just by worker and public expectation. It&#x27;s no longer acceptable for labourers to be working in dusty environments or working at heights without scaffolding and harnesses having been planned and setup first.<p>- Increasingly affluent populations are aging and naturally reducing in size. In such a demographic shift, workers can prefer safer and easier jobs that don&#x27;t risk life-long back and joint injuries and all the other types of health risks common to the construction industry.

2008 was low of the low for home values. In my view a few things have happened since:<p>1.hyperconsolidation in lenders<p>2. Real estate orgs have worked together to eliminate downward price pressures.<p>3. NIMBYs and generally “home ownership associations “ have created so many barriers to building &amp; reaped the profits in their own home values.<p>Some good news is that most populations are slowing or declining on the globe, and that ought to be a substantial risk to mass ownership, but that will take 20years to manifest.

Same here in the Netherlands. I currently rent a 130m3 house for 2500 euros. 500 energy. 2500 euros daycare (4 kids). I think I spend around 6000, 7000 euros after taxes on fixed costs. I wont complain. My life is good, but for most peope here impossible to pay those amounts. Result is that lots of my friends with &quot;normal&quot; jobs end up living in small apartments far outside the cities or even move to a completely different part of the country. Its very hard now to start a life now. Unless you make a shitton of money. Everything became so expensive these days. Its unsustainable imho.

Factors boosting demand<p>-Cheap credit with ever-decreasing lending standards (not like 2006 though, not yet) -Population growth (whether immigration or births — does not make a difference, though babies can&#x27;t buy houses) -&quot;Pent up&quot; demand, people who wanted to move during COVID but did not because of COVID (somehow), who now do want to move<p>Factors restricting supply<p>-Building -Zoning -Most of all: nobody wants to leave their 3% rate, and there is about 11T of outstanding mortgage debt, most of which at the 2020-2022 low rates<p>Factors inflating prices<p>-(Mostly) obsolete realtors charging 6% in a world with Zillow -Orgy of money-printing

&gt; The growing outcry has raised pressure on the US central bank to cut interest rates to bring relief, a move Federal Reserve chairman Jerome Powell has said is likely at some point.<p>I don&#x27;t think the solution is as simple as just &quot;cutting rates&quot;. Low rates lead to incredibly fierce bidding wars that can drive up the price by tens of thousands of dollars. An acquaintance of mine and his wife bid $50,000 over the asking price on a house in the Boston area a few years ago. They were outbid by an additional $60,000 (total of $110,000 over the asking price). Another acquaintance narrowly defeated 30+ other bidders (!) to get his house.<p>My wife and I bought a house last year during a time when rates were _highest_. Ironically, I believe this was actually a fairly great time to buy. Competition from other buyers was low, and sellers were more willing to negotiate because they didn&#x27;t know if they would be able to sell anytime soon. And yes, we now have a higher interest rate, but that can be refinanced down the road.<p>It&#x27;s a complex situation. I do hope for lower interest rates, but I don&#x27;t think that alone is going to solve the issue.

For those interested, Gary Stevenson has an interesting take on what is causing this, even though his view is focused on the UK market: <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=kNUNR2NZvFM" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=kNUNR2NZvFM</a>

“But shelling out $2,500 (£1,960) a month in rent doesn&#x27;t leave much left over”<p>I’ve noticed roommates are not a thing for many people anymore, particularly among younger folk. Is this a post-Covid thing?

I never really bothered much before to check previous articles on the same topic by the same reporter. It&#x27;s interesting that there was an article from this same reporter in November 2019 discussing US tech giants investing in housing (<a href="https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-50295130" rel="nofollow">https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-50295130</a>). Then, there was another article about housing prices in April 2022 (<a href="https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-60921223" rel="nofollow">https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-60921223</a>) and 2023 (<a href="https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-64178954" rel="nofollow">https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-64178954</a>), and another in October 2023 (<a href="https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-67152845" rel="nofollow">https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-67152845</a>), and then one in January 2024 (<a href="https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-68035274" rel="nofollow">https:&#x2F;&#x2F;www.bbc.com&#x2F;news&#x2F;business-68035274</a>). I just never really thought about looking at previous articles by the same reporter before.<p>I look forward to an article when housing prices retreat rather than increase.

They&#x27;re always the same reasons:<p>- Properties in world-class cities are in demand globally<p>- NIMBYism means it&#x27;s hard to build new housing or increase density<p>- Resource costs and wages are high in world-class cities<p>The first one is a demand-side driver, the last two are supply-side drivers. There aren&#x27;t any palatable solutions to reduce the impact of these drivers, at least not ones that do not negatively impact other sectors of the economy.

Why are 30yr fixed rate mortgages 7% and up so massively from just a few years ago? Shouldn&#x27;t the interest on the mortgage be about the expectation of average interbank rates for the coming years, plus some margin? Sure interest rates shot up recently, but did banks go from believing we&#x27;d have 3% long term average to 7%?<p>My mortgage (not UK) are just fixed in various parts on various semi-short terms (3 months, 1year, 3 years etc). The shortest ones are basically the current interbank rate plus 1%. The 3 year one is the banks expectation of interest over 3 years, plus a small margin and so on. For 10 year or longer the current rates are 4%.<p>Why are interest rates so much higher for mortgages in the UK, despite often demanding longer fixed terms? Is the risk massively higher? (My loan uses the home as collateral but also future income, meaning if the home becomes worthless I&#x27;m still on the line for repaying the lone for as long as it takes, I can&#x27;t just leave the keys and let the bank eat the risk).

We all want more housing but zoning laws and NIMBYs prevent us from building proper urban housing. Yet there’s nothing stopping someone from building a 6bd&#x2F;4ba house in my neighborhood and renting the whole thing out for $1600&#x2F;rm.

&gt; In recent months, the White House has tried to address concerns about affordability head on, offering proposals such as rules to limit closing costs and a $10,000 tax credit for first time homebuyers.<p>&quot;Here&#x27;s a nickel, sonny.&quot;

Younger people need to join the YIMBY movement in droves. Your economic future depends on removing the crushing restrictions on building new homes, especially homes in high wage cities. The older Boomer generation will never change its NIMBY views. Never.

I am sure people are priced out of &quot;desirable&quot; places. I don&#x27;t think this can be fixed by oversupplying homes in specific areas. You need to incentivize people to move into low dense areas.

Are mortage rates that high everywhere in the US? 7%, or 6.625% sound ridiculous to me in norther europe. I pay 4.54% now with roling 3 month-fixed rates, but its going down now, and I could get it for 3.55% if I fixed it for 5 years. 30 years fixed is pretty much impossible here in Sweden. But you get ~30% of your interest back as tax deduction, so effectively I am borrowing at ~3% (in SEK). Which, again, is cheaper than 4.5% in the US in 2019!!!, a time when my parents could borrow 20 years fixed at ~2.2% (in the euro zone).

Sydney has the capacity to build a highrise crown casino at the city centre then why can&#x27;t they hire the same builders to continue building residential 3BDR-4BDR homes in the suburbs which will also allow locals to have children. I believe the pricing of various things involved is insane and not where it should be to allow this to materialise. The rents, insurance, wage bills and capital cost seems to be the major bottlenecks.

I always assumed when the baby boomers retired there would be a flood of big family houses coming up for sale.<p>I see it in my parents that they&#x27;re pretty comfortable staying in the family house as long as possible, I&#x27;m happy with this. It is made a lot easier by the fact that prices keep going up so staying in a house that is oversized financially is rewarding.<p>I&#x27;d like to think it&#x27;ll all come to and end one day as the spiral reverses, but I&#x27;ve been wrong for so long now I&#x27;m losing faith.

In my opinion the problem is the ability of people to write some percentage of owned homes as tax losses as depracation to a ridiculous degree. Its often possible to buy a home, write off its entire value as a loss due to depracation, and then sell it for more then you bought it for, without ever once renting or using it. This is also true for some other asset classes, like ships

The problem is that we&#x27;ve made our housing into a financial product, not housing. We optimize for things like appreciation, maximizing square footage, etc. Not optimizing for the people who live in them, our communities.<p>Same with startups, anymore many of them are setup as attractive financial products, not attractive businesses.

What&#x27;s scary is people don&#x27;t understand how something being unaffordable is not much different from it being prohibited. And prohibition always leads to the rise of organized crime. Living in the Bay Area, I can&#x27;t help but wonder if the homeless encampments are already under organized crime rule.

As many have noted, the problem is largely Byzantine zoning regulations, NIMBYism, and a &quot;vetocracy&quot; system that makes it extremely hard to build housing in so major metropolitan areas. For example, NYC likely needs at least half a million new homes to keep up with demand.

Even if you can afford to buy a home it isn&#x27;t necessarily economical accounting in the opportunity cost of capital. This ofc varies across different times and situations regarding interest rates, regulation on mortgages in your jurisdiction, house prices and rent prices.

In a lot of ways this is a problem creating itself.<p>The reason Home Ownership is desirable is that the pricing of houses go up faster then both inflation and depreciation caused by wear decreases the utility value of a dwelling, and the reason that houses are expensive is that the state actors are invested enough in this cycle to make sure it never really breaks.<p>In a real functional market there would be no real benefit to house ownership over long term leases. but were dealing with a market thats been deliberately broken by policies promoting home ownership for reasons that&#x27;s fundamentally religious&#x2F;dogmatic in nature.

I&#x27;m an expat now but I&#x27;m hearing it&#x27;s even worse back in Australia. [Disclaimer: Some of this may be off because I&#x27;m hearing it second-hand, not actively investigating myself, so corrections are welcome]<p>I hear people who are already in the top 1-2% in income are told their borrowing power is only A$1M (~U$660K) while houses at all worth raising a family in cost A$3-6M. Banks don&#x27;t seem to want to lend to them because they could instead lend to yet another property investor that already has a portfolio full of equity and collateral. The houses will sell and the mortgages will close, the banks can afford to be picky.<p>If you work in tech non-remotely, you&#x27;re looking at the high end of that because you&#x27;re competing with everyone else working tech, heavily weighted towards Sydney, and the rest of the country&#x27;s housing supply is largely irrelevant. The cities certainly aren&#x27;t designed for car commuting, so the supply of locations is further narrowed to places that are either so close they&#x27;re walkable or have good public transport.<p>To my US readers I cannot emphasize enough how much this limits people&#x27;s options both ways. When you have a non-remote job it limits your housing options, and if you&#x27;re lucky enough to lock in a house, now it&#x27;s limited your employment options in return. This isn&#x27;t great for housing or employment markets. I&#x27;d like to think remote work has helped some people, but the most career-focused people I know are sticking to in-person connections, competing with everyone else doing the same.<p>Meanwhile cashed-up investors can buy up several houses and neither live in them nor rent them out. They&#x27;re taking supply away from both the buying and renting markets, which is their legal right and a smart move on their part, but totally dysfunctional for the market as a whole. Anyone who does buy a house to rent it out is doing their small part to make buying less affordable but make renting more affordable, making it just that little bit less likely that the next person out there is a buyer of any kind.<p>Of course there&#x27;s been doomsaying about a housing bubble pop for decades, especially during the world-famous pandemic lockdowns. Nothing popped and the exponential runaway pricing continues. Surely it&#x27;s getting untenable enough to pop somehow, if my successful friends can&#x27;t buy houses then I don&#x27;t know who&#x27;s left in the market except the real estate investors themselves.<p>I honestly don&#x27;t see how I can un-expat now, and I&#x27;m just counting myself lucky to own property in the USA. If I want to keep this sweet deal, my options for moving are more limited than they&#x27;ve ever been, but it looks like a lot of people would gladly sacrifice flexibility to have anywhere near a tenable deal on housing.

Canada in particular has a very strange housing affordability issue... artificial growth!<p>Our population is currently increasing by over 1 million people each year and it is 98% immigration.<p>I think an odd effect of very very high immigration is that everyone who arrives is presumably of working age and needs to be housed outside of a family unit. This puts immense pressure on a housing supply that is already decades behind where it should be and as a result prices are exploding.<p>Canada as a country has a population of about ~40 million people. The main country we are getting our immigration from is India with a population of nearly 2 billion. There is no possible world in which Canada can construct enough housing for the nearly infinite supply of people that it seems to be importing<p>A recent study showed it currently takes on average 10 years to go from acquiring a piece of land to building an apartment. This is clearly problematic but there is a physical limitation on how fast housing can be constructed.

The problem is pretty easy to fix. 50-70% of homes (Depends on Area) are owned by people over 58-70 (Baby Boomers). They don&#x27;t have good senior apartment&#x2F;living options. Make more senior housing and provide incentives for them to sell their homes. There are so few available affordable senior apartment options. It&#x27;s really saddening. Most places have 5-10 year waiting lists, if the waiting list is open at all.<p>Fixing senior living options will create inventory in the market and give seniors better choices with an active community.

In my opinion, there can only be one solution to this that will come sooner or later. A great correction following simplified zoning &amp; building legislation. Federal governments across the west need to take control of building and zoning. Planning can remain a city&#x2F;state&#x2F;provincial affair, but it must be done under standardized and simplified building and zoning legislation. We are wasting unfathomable economic potential on rising housing costs, rent seeking, and artificially limiting economic development in urban centres.<p>It is probably exceptionally challenging to manage the economic fallout from such a correction, but I believe it has to happen. I would also support draconian measures which would forcibly and retroactively destroy accrued home value to ensure we haven&#x27;t extracted wealth from the younger generations. I realize this is unprecedented and probably unconstitutional, but that&#x27;s my emotional response to the problem. It is plain as day: Boomers extracted the wealth out of the country and now they&#x27;re extracting the wealth out of their kids. It has to be stopped.

Pff, in Switzerland, the mean age of the first-time home buyer is 48, and the mean age of a homeowner is 58. And those are the luckiest and the richest who could actually afford buying a house; many rent for life.

A byproduct of large financial entities investing against each other in the market comprised of places where people need to live.<p>Maybe that was not in the public&#x27;s interest.

The hard truth is that all of these potential solutions are just band-aids. Until housing is no longer treated as a viable investment vehicle, we are fucked.

The number of people that think owning property&#x2F;a house is not only a “right” but “required” is *absurd*. It’s an idea pushed upon the “next” generation to prop up the value of their assets. :eyeroll:<p>On top of the weird collective delusion, most ignore the huge financial&#x2F;time burden that is owning a home. It is not cheap, and anyone that tells you otherwise is *literally lying*.<p>There’s the never-ending maintenance that costs thousands per year in both money and time, small problems can cost thousands of dollars to fix, variable property taxes, variable insurance rates, having an asset worth being sued over, shitty neighbors that you can’t easily move away from, bad school districts, etc etc etc.<p>Is home ownership right for _some_ people? Sure. Is it right for the majority of people? Probably not. Should corporations be allowed to own housing? Hell no.

Yes, and I think there is some truth to the statement that the older generations are stealing from the younger generations, whatever the underlying financial&#x2F;technical explanation may be.<p>The game is rigged. But that should be no surprise. People who enter a game of Monopoly after a few rounds have been played know that they will be swimming against a strong current. Our financial systems are unfair and broken.

In the UK we basically just seem to have some variant of regulatory capture.<p>The man on the street wants less immigration and more housebuilding so that they can start a family.<p>The political class seem to want to just import a ton of low skilled foreigners because they&#x27;ll take lower living standards.<p>It&#x27;s ass backwards. The solutions are obvious.

The US government printed a bazillion dollars during covid, continues to spend wildly, and engages in practices like transfer of college debt from debtors to tax payers.<p>It&#x27;s a complete mystery why inflation has run amuck.

My local grocery store has a “senior discount” of 10% off for <i>anyone</i> over 65. I find that sort of positive discrimination to be a gut punch to young families.

If you leave in some mid EU country, chances are a lot of your current government&#x27;s policies are based on &quot;sticking it to the man&quot;.<p>The man used to be an upper-ish class dude (p96+), but due to how horribly slow and uneducated governments are at making data-driven decisions, the man is now a working or middle class dude.<p>As a result, you will see property prices skyrocket in your area while the government takes 50%+ of your 5% pay raise, leaving you only some pocket change richer than before. But the property owners in your area will be richer every year because their great grandad hunted a bunch of whales or some shit, and so called progressive policy makers are clueless about wealth distribution.

I can&#x27;t imagine there won&#x27;t be a major crash soon and then Biden will shift from shoveling more printed money to new &quot;homebuyers&quot; (his $10K tax credit and his proposed $400&#x2F;month grant for the first 4 years) to printing more money to bail out the industry he propped up.<p>The only solution, of course, is to build more houses! Build until prices fall! (And don&#x27;t bail out people who are now underwater because prices fell.)

Wealth inequality of the Global South has reached the West. Folks will have to live in smaller spaces with more people.

As long as people are willing to pay “anything” for their home - prices will always be near the max that they are able to afford.<p>To be honest I don’t think capitalism is able to fix this problem, the only solution I see if government takes over and subsidizes housing enough from taxes to make it more affordable for salaried employees (needs to come with strings attached so the free market does not turn a quick buck reselling)

Tax 2nd properties 100%.

Those problems of unaffordability of homes is a symptomatic effect of an earlier problem. During COVID-19, facing possible catastrophe in the Economy, Trump presidency pumped money into the US economy. The Biden presidency continued this (despite no indicator of recession). There is a 7% gap between Federal income and expenditure, and this drives up the interest rates, making home ownership less affordable. &quot;Across the aisle&quot; there is no appetite to raise taxes or cut spending so the problem will only get worse. Since the dollar is a global reserve currency, any printing of money is diluted across the global demand for dollars. So the reckoning will come quite late (in contrast with Greece who had to be bailed out following a similar trajectory). But the reckoning will come. Unless spectacular success in productivity arises from AI (which cannot be discounted - the US is a leader here), there will be a crunch where savage cuts and bail outs are needed.<p>Note US GDP looks great until you realise that it is in dollars whose nominal purchasing power is diminishing. There is no better was of seeing this than in the price of housing.

946 comments!<p>Here is mine. The Boomers, the generation born 1945 - 1965, benefited from affordable housing, and when it grew up, set about making housing an investment.<p>&#x27;Affordable &#x27; and &#x27;investment&#x27; are mutually exclusive. That is <i>why</i> supply is not keeping up with demand, and why there are so many unoccupied houses.

Time to raise minimum wage to $50&#x2F;hour?

This won&#x27;t end until the boomers cash out their home equity. It&#x27;s political suicide to do anything threatening that.

In my mind I redefine the housing crisis in Canada as a business clustering problem. I think the percentage of attractive businesses that are concentrated in a few areas is too high. This comes in conflict with the human desire to not live in a sardine can. I would leave my city, but where would I work? My options to have a dignified life feel limited to me, especially in tech. Tech bros like me are pretty constrained to cities, which I really don&#x27;t like.

Our economy is designed to extract wealth from the young to the old and the rich. Home ownership has become a primary method of creating generational wealth and that was a huge policy mistake. Even China has made this mistake. Almost all Western countries have too.<p>So let me explain somethign that is often misconstrued about leftist sentiment, be in socialism or whatever: leftists generally make the distinction between <i>personal property</i> and <i>private property</i>.<p>Private property is what we have now. We have wealthy landlords buying up houses to drive up prices. We have single homeowners who think their home value is going up so that&#x27;s good for them so they vote for these policies. A leftist position is that you&#x27;re entitled to own your personal residence but there&#x27;s next to no landlording. Housing is a basic human need. The only way to provide it in a sustainable way is with <i>social housing</i>. For example, the majority of housing in Vienna is social housing.<p>The UK came really close last century to ending landlording [1] (ie councils simply bought houses from landlords who wanted out).<p>But if you think about it: there&#x27;s no way your $200k turns into a $600k house without that money coming from somewhere. You&#x27;re taking it from the next generation.<p>Capitalism loves this because a) a bunch of capital owners become even wealthier and b) debt-laden workers and workers who will take any jobs they can get (ie it suppresses wages).<p>In the 1990s, the average house price in London was ~70k pounds. Now it&#x27;s over 700k.<p>Pretty much everything bad about modern society can be traced back to <i>private property</i>, be it intellectual property, housing or whatever.<p>People need to realize that if your house triples in value, you haven&#x27;t really gained anything. If you sell it, what now? You still have to live somewhere. That means higher rents or buying an equivalently priced home. Or downsizing or moving overseas. This is why housing is unlike other assets.<p>we, as a society, have decided to prioritize generational wealth from landlording by literally killing people by denying them housing.<p>[1]: <a href="https:&#x2F;&#x2F;www.theguardian.com&#x2F;lifeandstyle&#x2F;2024&#x2F;mar&#x2F;19&#x2F;end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis" rel="nofollow">https:&#x2F;&#x2F;www.theguardian.com&#x2F;lifeandstyle&#x2F;2024&#x2F;mar&#x2F;19&#x2F;end-of-...</a>

Honestly I&#x27;d love for some good data, rather than cherry-pick journalism. It&#x27;s crazy how many news articles will simply parrot a narrative without actually investigating it.<p>The discussion on housing should start with one fact: the supply of housing has been growing faster than the size of the population, decade after decade, for a very long time.<p>This is why the number of people per home, has been dropping decade after decade. That is a measure of luxury. We can afford homes with fewer people. People can afford to be single and live alone. We can afford not to take in a roommate. Couples can afford to each have their own home. That&#x27;s not an indication of a housing crisis or being priced out.<p>Then there is home size, it has been increasing also, decade after decade. We can afford to live in bigger homes. Again, a measure of luxury.<p>Anecdotes about &#x27;my (grand)parents lived in XYZ home that&#x27;s way bigger than mine&#x27; are just that, anecdotes. The data shows we live in bigger homes with fewer people, in fact we have double the housing that we had a few decades ago. In other words, the average person&#x27;s lifestyle with respect to housing has greatly, greatly improved compared to previous generations.<p>What is often also not mentioned is that affordability is not a function of prices only, but of prices x the cost of money (i.e. interest rates). In the 1980s interest rates were as high as 18%, now it&#x27;s 1&#x2F;3rd of that at around 6%. That&#x27;s the true cost of housing. Taking $1000 and paying off $1000 in debt has no impact on your equity, you&#x27;re as rich as you were before the transaction. Paying interest however is money you&#x27;ll never see again. That cost was 3x as high a few decades ago. Prices haven&#x27;t tripled when adjusted for inflation and salaries, not even close. That&#x27;s why affordability of housing isn&#x27;t the disaster that many people think it is.<p>Here is an old source (2016), which you may think is outdated. But it shows a multi-decade trend that cuts across the same price increases we&#x27;ve seen in recent years:<p><a href="https:&#x2F;&#x2F;www.aei.org&#x2F;carpe-diem&#x2F;new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.aei.org&#x2F;carpe-diem&#x2F;new-us-homes-today-are-1000-s...</a><p>For another source that runs to 2020: <a href="https:&#x2F;&#x2F;humanprogress.org&#x2F;u-s-housing-became-much-more-affordable-over-the-last-40-years&#x2F;?ref=trend&amp;related=2147" rel="nofollow">https:&#x2F;&#x2F;humanprogress.org&#x2F;u-s-housing-became-much-more-affor...</a><p>I&#x27;m not even going into how the function of housing has changed. With today&#x27;s connectivity (netflix, spotify, internet, food delivery, teams&#x2F;slack, amazon etc), it has become more than ever: an workplace&#x2F;office, a cinema, a library, a music studio, a game hall, a restaurant, a shopping mall. Its value has increased.<p>No, I&#x27;m not saying finding housing is super easy for anyone and everyone. I recognise many find challenges. But what is simply not true, is that it is any more difficult than the past. In fact it has never been easier. What appears true however is that our lifestyle expectations keep increasing faster than our lifestyles are improving.

Not voting in psychopaths would go a long way.

What if the common trend of &#x27;house prices rising totally out of whack&#x27; amongst various locales (Canada, USA, Europe, Australia, China) is not.. actually, a common trend? No single explanation suffices; it&#x27;s just coincidence.<p>Low interest rates raise house prices. This has to be a &#x27;duh&#x27; thing, really, but, governments don&#x27;t really appear to &#x27;get it&#x27;, or, play dumb for political reasons. If, after adjusting for inflation and the like, the exact same house costs €500,000 in 1980 but costs €1,000,000 in 2024, BUT, interest rates in 1980 are double what they are in 2024, your mortgage cost to buy that house is __pretty much identical__.<p>It&#x27;s oversimplified to say that this means &#x27;real house price has not changed&#x27;. It still takes more money to actually buy that house. But, of the money you pay every month for your house, more of it is a weird, not very liquid investment portfolio, and less of it a weird form of rent. It&#x27;s got all sorts of problems: Not everybody qualifies for a mortgage in the first place, for starters. But _in the end the amount of money you have to burn just to live in a house is identical in this hypothetical scenario_.<p>One lesson you could learn from it is that everybody is whining and houses are just as affordable as they&#x27;ve always been, but that&#x27;s not my point, and isn&#x27;t really true. The point is more: With low interest rates, house prices skyrocket.<p>This explains _some_ high house prices, but certainly not all.<p>For example, China&#x27;s is an utterly different explanation. Due to the way their government is set up, the usual benefits of a free market, namely that the population &#x27;intelligence of the masses&#x27; their way to efficient allocation of resources isn&#x27;t a thing china &#x27;does&#x27;, in essence. Government decides what happens. And so far, they&#x27;ve decided to build more houses than there will ever be chinese people to live in them. Ever. This is a bit of a problem today and will be far more of a problem tomorrow. But that&#x27;s it. That&#x27;s the simple, sufficient, and therefore only required explanation. It has NOTHING to do with how hard to it is to build in China (it is not), nor with population growth (it doesn&#x27;t, or rather, a sheer and severe drop in house prices looming, that&#x27;ll be explained by China&#x27;s population glut). It&#x27;s just that: They built way too many, and their market system cannot respond in kind to stop that runaway process.<p>In europe, yes, in large part runaway NIMBYism and being at the forefront of ecological change, putting limits on how much nitrogen&#x2F;co2 can be &#x27;used up&#x27;, and building does take quite a bit of that - has put the breaks on building. Especially combined with extremely low unemployment which hurts the building sector. &quot;Too few houses being built&quot; is a factor.<p>But not the only one. And I think, not even the largest one.<p>Yet another explanation is lack of efficiency: Fewer people partner up, so, more people live alone. They tend to use space inefficiently: They all want their own kitchen, their own shower, their own living room, their own bed room, their own hallway, and so on. A really cheap and ludicrously efficient solution to _that_ is dorm-style living together. Instead of having a small crappy single-tenant kitchen, why not have a giant luxurious very well stocked kitchen you share with 9 other solo tenants? Yes, there are all sorts of downsides to this (which lout has made a mess of the kitchen?!? - and nobody wants to deal with a cleaning schedule), but in the end it is vastly more efficient, and better for social cohesion.<p>Society in e.g. europe and the US has not, yet, adapted to it. I hope it will. It&#x27;ll solve the unaffordability of housing crisis all on its own if society wants to invest in it.

dupe<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40489250">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40489250</a>

Dupe: 6 hours ago. 71 comments: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40489250">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40489250</a><p>(I thought there was some dupe protection for exact urls in such a close time period?)

[dupe]<p>Discussion: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40489250">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=40489250</a>

Low Interest rates, High Immigration, Wage stagnation and not enough building. Demand outweighs supply and higher interest rates make it difficult for buyers and builders. Immigration puts strain on the both Housing and Rentals making it unaffordable for existing pop.<p>In places like Toronto, huge influx of people where the city doubled in size in a few short years not only putting strain on housing and rentals but everything (hospitals, roads, schools, you name it).<p>In places like Texas the huge influx of out state people drove up prices where housing in DFW basically doubled in price since 2019. Very much like what Toronto went through. Migration from high tax states to low tax states has now made low tax states high tax states and Texas is becoming very unaffordable quickly.<p>Don&#x27;t know what the end game is. In Ontario, Canada what use to cost 200k 10 years ago now is 1 million. What use to cost 1 million is 5 plus million and there is no end to the madness. You have foreigners from Arab countries, China, India paying cash for 2-3 million dollar homes.