Economist explains why you can't afford a house anymore

[@MoneyMacro]

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[@Abu_Shawarib]

The link in the video description is not clickable, but here it is. 🤔KZbin is acting weird

[@PoliticalEconomy101]

You forgot two more theories: a) The Homevoter Hypothesis by William Fischel, and b) see the video entitled "Why Is the Rent So Damn High? The Real Reason Will Shock You"

[@carkawalakhatulistiwa]

House to expensive for new family . Old rich people have 4 home As an investment. Increase house prices

[@carkawalakhatulistiwa]

Easily prohibited from owning more than 2 houses can reduce house prices. With Thousand of rich people forced to sell their 3rd and 4th homes

[@lingth]

In Singapore, the govt builds them.. offers the buyers a loan instead of the bank . Than enforce rules that you can't use it as an investment.. so to keep house affordable for ppl who need them to live not invest.

[@ddj2010]

Singapore does a lot of things right - because it was fortunate to start that way. I lived in Singapore, rented in NYC and own in Canada. Landlord and bank lobbies in either countries would never let these see the light of day! On the other hand, we have much cheaper cars 😊

[@xuedalong]

And also prevents all but the most insanely rich foreigners from buying homes with a 60% stamp duty. Yep. Six Zero. 😹

[@TurnRiver]

This is false. Singapore is one of the faster appreciating markets for investment. It is only difficult for the newer investor, because it will be challenging to find cash flowing properties for cheap. Fundamentals are all the same. Large cities with dense urban populations have some of the most expensive and unaffordable real estate in the world. NYC, Hong Kong, London, and Tokyo are examples of this.

[@OurLordandSaviorSigmar]

This is the correct way. Housing is a basic human need that should be kept away from speculation.

[@TurnRiver]

@@OurLordandSaviorSigmar Needs vs Wants. What I keep hearing is that we NEED affordable housing where we WANT to live.

[@juicemonger3872]

Regarding the IMF study at 16:10, one thing missing from the analysis is that while interest was higher and home prices lower, those buyers from the 1980's were able to refinance their mortgages as rates dropped, decreasing their monthly expenses. Buying at a high price with a low interest rate will NEVER present a similar opportunity.

[@alphamikeomega5728]

And the real interest rate was a lot lower than the nominal one, so if your income increased with inflation, it would be (relatively) more affordable. And before buying a house, you could deposit your money and be at the receiving end of the high nominal interest rates.

[@ANEEAMA]

Because there is an inverse relationship between the two due to the increase in demand. However, demand can be decreased by limiting citizens to purchase one house and banning foreign residents to purchase houses.

[@miketheneanderthal9490]

My parents took advantage of this. They struggled with their high payments with an 18% loan for several years, but then refinanced a couple times as interest rates went down.

[@PelosiStockPortfolio]

The high interest/low price scenario has several other advantages. 1. The interest is what you write off on your taxes (this is huge). 2. It requires less time to accumulate the down payment (also huge, it sucks for younger people to need to save 150k before they can get in the game).

[@petewilliamson2609]

Ah...good observation

[@NicholasBall130]

I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.

[@StacieBMui]

Consider buying stocks when the economy is not doing well, like during a recession. It could be a chance to buy them at a lower price and sell later when prices go up. Just keep in mind, this isn't financial advice, but sometimes it's better than keeping a lot of cash.

[@cowell621]

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[@cowell621]

Rebecca Nassar Dunne maintains an online presence that can be easily found through a simple search of her name on the internet.

[@VictorBiggerstaff]

I just checked her out and I have sent her an email. I hope she gets back to me soon

[@Ji-Min-j7b]

I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighbourhoods. Then you’ve got Better, average sized homes in nicer neighbourhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.

[@JefferyDuns]

Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult.

[@RobbieNixon-d1w]

Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.

[@PatrickLloyd-]

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[@RobbieNixon-d1w]

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[@PatrickLloyd-]

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[@caseybills5517]

Back in 2007, during my time working in real estate, I witnessed people purchasing newly built homes from builders with the plan to sell them before the closing of escrow to another buyer for a profit. The crash hit hard and fast, and I vividly recall many of these units ending up foreclosed upon, with the builder's plastic still covering the carpets.

[@LiaStrings]

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[@JamesLongman-v5r]

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[@TylerJamestown]

There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Sonya Lee Mitchell’’ for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.

[@crystalcassandra5597]

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[@networkgeekstuff9090]

I realized where the problem lies when I was buying my first apartment a few years back. On any apartment presnetation session there was me as 20-something old with my wife looking for a place to live and always competing with at least 2-3 other 40-50+ year olds looking for investment as their second-third apartment they can airbnb or rent. When young families have to compete with folks looking for an investment, that is not a good sign.

[@gold707786]

Also means top of a bubble. When people are buying gold at Costco , gold prices are maxing out. 40-50 year olds should not be buying real estate at top prices because of their age. If I was 20ish I would stay renting( and get the wife on onlyfans to make extra cash). ''Your house dreams will happen faster'', you can argue back to her.

[@richardbloemenkamp8532]

I'm indeed your 40-50+ category: secondary real-estate in and around big cities remains a stable investment with a reasonable yield being the rent plus possible appreciation. Stocks are often too volatile and too easy to tax in Europe because most voters do not own a lot of stocks, so many voter agree with high tax on stocks to tax the rich. If however regulators propose to put heavy taxes on secondary real-estate, it will impact too many secondary real-estate owners and they will not win elections. Housing prices may temporarily go down, which is fine. You still have the rent. New construction will hold and a few years later there will be a shortage again boosting the housing prices back up. Houses and land in and around big cities are scarce and will likely remain scarce over the long run as the world population keeps growing. Best is to not buy a the top of a bubble but for the rest you will be ok. If you do not have a lot of money you can start by buying a parking place of a student flat which you can rent to other people while at the same time you rent your own apartment.

[@samuela-aegisdottir]

I agree and I also think that this is what they get wrong in te video. Investment appartments don't have to be empty. Middle class and upper middle class buyers ususally rent them, wither long term, AirBnB or to a company that rents it to others.

[@MrCymix]

​@richardbloemenkamp8532 what makes you think you aren't "the rich", my guy. I'm in your group too. These kids are paying your mortgage(s) (if you have them) and your social security (if you can collect), and maybe your healthcare (if you qualify). And, what are they getting out of it? Probably not a lot more than poorer. Top it all off, social security is horribly insolvent so they pay in to something for which they'll never see a return. No wonder why they're upset.

[@snark567]

Landlords should not be allowed to do that with homes. It's one thing to rent out a warehouse, it's another thing to buy out homes and rent them out. It's going to cripple the country.

[@Zei33]

The NIMBYs in Australia are the worst. The government wanted to build public transport in my city, a light rail to get from one side to the other. It would reduce the need for cars and give us the opportunity to build higher density. But NO. Everywhere you would see bumper stickers “NO LIGHT RAIL”. Why they’re opposed to it? I have no idea.

[@mat3714]

Same here, we had a federal founding to foot half of the cost of a public transportation system but people got angry and asked for another bridge that won't be built instead......so we ended up with nothing ( aside the hundreds of millions and countless wasted hours on studies ) and my brain hurts.

[@JamielDeAbrew]

In Australia NIMBYs are part of the problem. And there are many other parts too. Eg1 taxing property when purchased/sold. This discourages empty nesters from downsizing. That would add supply of rooms to the market. Removing this disincentive to moving would save the government on transportation infrastructure costs too. Eg2 the family home is exempt from government pension tests. This provides an incentive for empty nesters to stay in a larger house than they need. Eg3 tax advantages for workers to invest in land (including land with homes on it). Unfortunately this pulls investment away from productivity investment in business. Eg4 an economic system that relies on population growth to fund the aged pension and aged care. Eg5 infrastructure investment taking demand for tradespeople and materials - increasing the cost of building new homes And probably many other factors that I have missed.

[@robgrey6183]

Because expanded public transport gives criminals access to decent neighborhoods. And public transit is where bums go to sleep, and certain demographics go to collect "reparations".

[@robgrey6183]

Public transit gives cri*m*nals access to decent neighborhoods. Decent people don't want that.

[@skyworm8006]

People are allowed to not want their neighbourhood completely changed, or in some cases destroyed and residents forced out, for infrastructure of debatable merit that they obviously don't want. Not to mention other, very suspect policies. To suggest otherwise makes you anti-democratic. You are blaming something that doesn't really exist, your fixation on 'NIMBYs' which is not actually a phenomenon in this country but something you imported from the internet as a fantastical ideological opponent. The term was created and fundamentally is about characterising locals having a say in what happens to where they live as somehow regressive, and that they should just shut up and let those in power, or corporations, do whatever. It's very telling that the term is originally and most commonly applied to neighbourhoods with a high standard of living, low crime, and strong community spirit (not to say you use it in this way though). i.e. neighbourhoods that are politically very self-determining. Who don't just accept abuses and mismanagement. Rather than about the merits of specific infrastructure. So perhaps try getting people on board, if the merits are truly clear, and not imposing a group that doesn't exist as a way of dehumanising everyone or explaining why something didn't happen when the real reason may be something else, like some bureaucrat just deciding not to? Or upon conducting studies, realising it wasn't a good idea?

[@TheJubess]

All though a cheap house with a mortgage with a high interest rate and an expensive house with a mortgage with a low interest rate might me paying the same monthly payment. The first has more opportunities: 1. Refinancing when rates drop 2. Paying off your debt will instantly give you a high yield without a lot of risk.

[@7fall]

Rates mean absolutely nothing, and serve to distract. It literally has no impact whatsoever, as it’s a percent x base, the base being price. 90% rate on a $10,000 house is much better than 1% rate on a $900,000 house. The only thing that matters, is the price that’s locked in.

[@ginalley]

I'm no economist so I'm not sure if this is correct but for australia, house price to income ratio went from 3.5 in 1980s to 6+ today. Wouldn't this mean mortgages in the country would be harder to obtain, therefore muting the point posed by the IMF on mortgage repayments.

[@Descriptor413]

The fact that we need low interest rates for things to be affordable is itself a massive red flag that things are going wrong. It means our economy has a very weak foundation, and massively inflates risk in a way that we may not be able to mitigate next time. We've been living beyond our means for decades while making raising the bar to enter into society so high that many aren't able to reach it. Something is going to have to give.

[@samuela-aegisdottir]

Another thing is that banks don't lent you the whole amount, so you need to save some part of the price in advance. This is much easier when the price of the house is lower, you can save the money more easily and the mortage is then much more accesible to you.

[@djri2984]

​@@7fall I think you get interest rates wrong. The rate is NOT calculated from price of the house but its percentage of how much your unpaid debt growths every year. If mortgage loan was $10,000 with 90% rate and loan term 30 years, your total payment would be $270,000 (it's less $900,000 but it's still more than you might expect).

[@MaximilianFischer497]

It is difficult to make exact projections for the housing market as it is still unclear how quickly or to what degree the Federal Reserve will reduce inflation and borrowing costs without having a substantial negative impact on demand from consumers for anything from houses to cars.

[@TicheDebb0]

If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone wants to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.

[@MarshalWagner457]

The new mortgage rates are crazy, add to that the recession and the fact that mortgage rules are getting more difficult, and home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. For now, get your money (as much as you can) out of the housing market and get into the financial markets or gold. If you are at a cross roads or need honest advice on the best moves to take now, it is best to seek an independent advisor who knows about the financial markets.

[@henryallard245]

I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?

[@MarshalWagner457]

“Sonya Lee Mitchell” is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.

[@RowanBryson]

Thank you for this Pointer. It was easy to find her handler, She seems very proficient and flexible. I booked a call session with her.

[@Benjamin.Jamin.]

Recommend looking at UK or Ireland. I work in planning and have worked in modelling housing demand in the past. We use factors including 1. internal migration. 2. external migration. 3. household size trends. 4. household formation. 5. birth / death rate. We've known in the UK since the 00's that HUGE numbers of new houses were needed. External immigration has been even higher than predicted. Household formation, a bit less. Ofc nowhere near enough were built. Add speculation, NIMBY factor etc. and its a disaster. But at the bottom is supply/demand.

[@JimmyLeeJr]

But LSE says immigration has absolutely no effect on housing prices whatsoever. The BBC is very clear on this as well. Perhaps you require re-education on this topic, comrade.

[@think_query]

@@JimmyLeeJrI don’t know about immigration having absolutely no effect on housing… don’t immigrants need a place to live? Most people need shelter and housing thus consumption for housing goes up. Immigration may not have a big effect, but it is definitely not zero.

[@tropics8407]

Have you looked at the regulations suppressing building starts ? Esp the stupid greenie ones ? Let us know your thoughts

[@keithwollenberg5237]

@@JimmyLeeJr Note in this context that the LSE is actually the London School of Economics and Politics, and while it is a prestigious academic institution, it has a mandate beyond the objective pursuit of knowledge -- specifically, the advancement of the objectives of the Fabian Society (wiki). Thus, its pronouncements on this issue may be driven by another agenda.

[@linmal2242]

@@JimmyLeeJr LOL

[@rogerbartlet5720]

The NIMBY issue is rampant where I live - they gang up legally with HOA's , zoning and building permits to preserve property values. It turns you can get someones attention very easily with a story that has their home value dropping.

[@brimbles4999]

i think when you understand the fact ppl already have put a lot of monetary investment into their home with the promise they can sell it for retirement you can understand the fear of building new homes with the idea their home value will lower, the question is how can we involve current home owners in the building of new homes without destroying their retirement plan which i dont think we should take away with them. i think there could be a solution found that helps both parties, maybe a system that gives home owners in the area partial "bond" type owner ship over new properties in their area? maybe even a co-operative system where ownership is shared in the areas new transit stops are built, leading to more businesses and homes around those key areas where instead of push back we now have home owners begging for new developments in their backyard

[@PedroPrego]

​@@brimbles4999bs

[@Allaiya.]

100%. My city is doing a housing task force and were warned about a loud vocal minority pushing back & oh, that set off a ton of letters by boomers saying they weren't a minority.

[@enclave6285]

@@brimbles4999 As a homeowner, I will be the first to say I have NO right to enforce zoning restrictions to benefit my retirement prospects. I bought 1 house, I don’t have the right to make others homeless and broke by trying to stop more from being built.

[@enclave6285]

And I certainly don’t have the right to an ownership stake in land I didn’t buy.

[@dougpatterson7494]

I agree that housing should be seen as more of a consumption good than a speculative investment. I’m commenting from Canada and became a homeowner last autumn. I live in a city with among the 25 least expensive housing prices and I wouldn’t consider housing “cheap” here. I would earn more money doing a similar job in Vancouver or Toronto but only 30-50% more, not 170-200% more, to compensate for the nearly 3x as expensive median home price. Certainly not 400% more to compensate for the fact that my SFH in a good location and with a basement suite would be worth about 5x as much in Vancouver.

[@effexon]

sir, this is excellent summary of modern problems and urbanization. bringing in lot of immigrant workforce cannot fix this fundamental problem and city/public housing cannot build free houses below construction costs either. it comes down to distribute things also among cities better.

[@markferguson7563]

The innate crux of why properties in Canada, and Australia - and, this is also true for England, as opposed to Britain; likewise with the US, too - is irrefutably due to one factor, and that is buttressed in large-scale immigration programs. This is then exacerbated with supply not keeping up with demand. So, all of the other aspects, which are espoused by the host and, indeed, with all those people posting comments regarding this, that or something else (although certainly having validity) is ostensibly just waffling on in a sea of self-serving semantics. Because in any of these jurisdictions that are fully dependent upon fueling their GDP’s via importing consumers, if enough properties aren’t constructed to cope with demand, then the dire side-effect is OVER PRICED properties. David Ricardo and, particularly with Henry George, were theorizing and espousing comments and, indeed, warnings on all of the negative nuances impacting real estate prices. Apropos to Henry George, way back in 1881 - two years after his book, ‘Progress and Poverty’ was published he told a senate hearing during the Garfield administration that: “The overt essence of why property values should in crease is a result of productivity, and not speculation.” Alas, here we are over 140 years after Henry George wrote ‘Progress and Poverty’ and, also, 207 years since David Ricado wrote the ‘Law of Rent’, we have politicians and captains of industry in Australia, Canada, Britain, and the US who missed reading their perspectives. But there is a far, far greater detriment to consider for all of these nations that have implemented large-scale, and, moreover, non-discriminatory immigration schedules. And that is to ponder the severe sociological impairments that will come to bear upon these societies being fractured on race, culture and, worst of all, religion. Quite simply, immigrant groups from non-Anglo/European and, more so, non-Christian cradles have been over the past 20-30 years that they have become culturally insular colonies/enclaves. Thus, it’s only a short time away before these groups organise against these societies in their own parliaments. To garner this pending horror most assuredly comes to pass in Britain, with hundreds of thousands of Muslims rallying in pro-Palestinian, and anti-Israel rallies from the middle of October.

[@jarodarmstrong509]

Problem is you don't consume land, which is usually a significant portion if not the majority of a market price level for a house anywhere near a major economic center.

[@robgrey6183]

@@effexon The "immigrants" who are coming in don't want to work. They want to squat, and Free S***.

[@Descriptor413]

The fact that most people's only chance at making money is through owning a house is a massive problem in our economy. Simply owning a house doesn't produce any wealth, beyond maybe maintaining what's there. It doesn't expand our economy or increase our supplies. It's just pure speculation. And an economy built completely around that will by definition eventually fail.

[@asozialesnetzwerk]

I grew up in the southern German state of Bavaria. My region suffers from the "Munich factor". Can't fully prove it empirically though. Still sometimes there's the joke that the Munich metropolitan area reaches almost to Prague these days. The costs of living in Munich are just ridiculous. Problem is sorta twofold here. The city wants to expand but the farmers on the urban fringe do not want to sell their land to the city government. Also the city government until quite recently was very strict on how high you were allowed to build but if you can't expand your city you have to build higher... Anyways. The unaffordability of Munich including it's fringes creates a lot of commuters and makes commuting areas more attractive for people because working there is still pretty attractive driving up rent and property prices almost 100 km around Munich.

[@CzechShooter]

Ok Im from Prague so still withing the Munich metropolitan area 😀

[@ivankuzin8388]

People want to live there because there are better jobs there - so, they need not to expand the city (they try that now, with not a lot of success), they need to move some of these jobs away to other municipalities. There are some problems with that, of course - first, it goes against the traditional competitive approach, where municipalities are competing for jobs ; it might seem to hurt immediate tax returns (more jobs = more taxes) ; businesses that are to move (or even open from a start NOT in Munich) need to still pay Munich wages, or people will still go to Munich for more money. Business will know that costs for their employees are lower, so they won't do it voluntarily. Maybe something like a program where businesses are incentivized by tax subsidies (that would still be attractive after covering for still paying Munich wages) to move jobs away from Munich to other Bavarian municipalities will help here.

[@linmal2242]

@@ivankuzin8388 hat did happen in the v1960's in AUS with Govts giving incentives for businesses to move out of cities to regional areas. Did work briefly, then a change of gov dropped it, so now we have a Sydney two, three times the size back then with all the demands for infrastructure and chaos !

[@gauloise6442]

Also the globalisation of the housing market. It used to be Parisians lived in Paris, and maybe a handful of hardcore, dedicated expats. Now every wealthy person in China, India, Turkey, Dubai, you name it wants a pied a terre there, or in NYC or London, etc. Add that with so many apartments being converted to Air bnbs,.

[@PavillonNoirParis]

Le capitalisme n'a pas de frontière, c'est le système qu'on a voulu.

[@IllIl]

Looking sharp, Joeri! Thanks for another great video :)

[@Mulerider4Life]

Good overall summary. You are one of the few channels that try to tell the whole story. No click bait videos, just information. Please don't ever change!

[@carlospesqueraalonso4988]

100% agree. That is why I follow this channel!

[@Nobody-st7xh]

Check out Gary's Economics instead, he's much better

[@DemolitionManDemolishes]

I find Dr. Joeri's videos are hit and miss. Like this video for example, I dont see any proper conclusion - we saw some data, discussed possible factors, thats it. To get some conclusions I would have to dig through the data myself. Also, after mentioning the IMF study, it would be nice to know what you personally think of it, do you endorse it, or you find some flaws.

[@CarlGerhardt1]

He is missing another big factor...mass immigration to Western countries.

[@domepiece11]

Pppphhh, he blamed NIMBYs. Um, how about the corporate executives who created the Great Recession which created a shortage of new housing? Nah, let’s blame the middle class for everything, it’s more fun!

[@jeremybird5739]

I think you should have also looked at rent in this video. The canadian city i lived for years in had fairly flat rent rates for a long time. In the last 7 years they have more than doubled. The city centre has vast surface level parking lots which could be towers (based on zoning). A few years ago large parts of the city were up-zoned. With recent interest rate hikes housing costs have come down, because people couldn't afford mortgages. But that has increased pressure on rents. Renters are finding it increasingly difficult to save enough for the down payment. It was a good video.

[@madskittls]

I think you also miss a lot by having such a wide lens on the issue. Even country by country, you run into vast differences between housing markets in NYC and Cleveland/Ft Lauderdale.

[@SteveBluescemi]

Agreed. House prices vary with interest rates and other factors; with rent prices all those factors are included.

[@Line49Design]

He talks about rent at the 7 minute mark

[@hansverbeek822]

kzbin.info/www/bejne/ZorLZ5uQhqmaqNk

[@fredericthibault6692]

Forgot to mention a major issue in Canada: the cost per average household wage. A little less than 30 years ago, the average cost for a two-person household used to be two times their combined wage. Now it is four times. The average Canadian wage did not follow the house cost increase, which means that even if the interest rates are lower than they were 30 years ago, you will need a bigger cash down to buy a house. As a result, the younger generation cannot leave their parents' house because they cannot manage to have enough cash down to have a good enough mortgage to buy their first home in the city that they live and probably work.

[@markferguson7563]

The innate crux of why properties in Canada, and Australia - and, this is also true for England, as opposed to Britain; likewise with the US, too - is irrefutably due to one factor, and that is buttressed in large-scale immigration programs. This is then exacerbated with supply not keeping up with demand. So, all of the other aspects, which are espoused by the host and, indeed, with all those people posting comments regarding this, that or something else (although certainly having validity) is ostensibly just waffling on in a sea of self-serving semantics. Because in any of these jurisdictions that are fully dependent upon fueling their GDP’s via importing consumers, if enough properties aren’t constructed to cope with demand, then the dire side-effect is OVER PRICED properties. David Ricardo and, particularly with Henry George, were theorizing and espousing comments and, indeed, warnings on all of the negative nuances impacting real estate prices. Apropos to Henry George, way back in 1881 - two years after his book, ‘Progress and Poverty’ was published he told a senate hearing during the Garfield administration that: “The overt essence of why property values should in crease is a result of productivity, and not speculation.” Alas, here we are over 140 years after Henry George wrote ‘Progress and Poverty’ and, also, 207 years since David Ricado wrote the ‘Law of Rent’, we have politicians and captains of industry in Australia, Canada, Britain, and the US who missed reading their perspectives. But there is a far, far greater detriment to consider for all of these nations that have implemented large-scale, and, moreover, non-discriminatory immigration schedules. And that is to ponder the severe sociological impairments that will come to bear upon these societies being fractured on race, culture and, worst of all, religion. Quite simply, immigrant groups from non-Anglo/European and, more so, non-Christian cradles have been over the past 20-30 years that they have become culturally insular colonies/enclaves. Thus, it’s only a short time away before these groups organise against these societies in their own parliaments. To garner this pending horror most assuredly comes to pass in Britain, with hundreds of thousands of Muslims rallying in pro-Palestinian, and anti-Israel rallies from the middle of October.

[@antoniiocaluso1071]

@@markferguson7563 sure, well...that's how it is, for sure. glad to hear everything else is OK for ya, though! just be thankful there's no Mongols just over your hilltop!

[@parkerbohnn]

The average fixer upper home costs about 1.5 million so the average person makes just under $60,000 a year so that's 25 times gross income as single people still exist. Of course after you pay all the taxes and everything else it works out to about 100 times whatever income is leftover.

[@Artagah]

​​@@markferguson7563 ok now summarize this in a single sentence cause it's easy to misunderstand and most aren't gonna bother to read lol. I got "the immigrants are to blame, fuck em lol" from this, does that sound about right? Fancy words don't make the sentiment any better or more justified. If I misunderstood then please correct.

[@thelegendaryck]

Depends where you are and your spending habits, im putting 20% down atm on a 134k house with minimal repairs needed, i only make like 25k a year and saved for 5 or so years

[@StephanieG.Augustus]

People try to predict the economy not realizing it is not a capitalistic market, its a command economy, central planning! my concern is, instead of having much dollar in bank that could lose value to inflation, do I save in gold to reserve and grow wealth for now, or just hang on?

[@heatherj-o5j]

truth is that gold serves as an inflation hedge in the long run, but not profitable in the short run. only thing you can predict is a strong effort of wealth transfer from the people to the powerful. luckily some folks find solution in financial advisors

[@manueldrum]

Sure, investing is plain-sailing with the aid of an invt-specialist, thus I've always delegated my excesses ever since the rona-outbreak in January 2020 using a shrewd advisor, and my investments have compounded by at least 300%, summing up $820k ROI as of today.

[@Saviourtina-c4i]

this is incredible! how can I vet your advisor if you please? definitely would love to make money from the market too, but a complete newb..

[@manueldrum]

‘’Stacy Lynn Staples’’ is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.

[@CharlesT.Foster]

Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.

[@jennebaram9881]

I watched my neighborhood- where pricing had been fairly stable for decades- become unaffordable overnight. It took about three years sum total- with property prices doubling every year. What I personally witnessed happen was a rich to buy and flip- or purchase investment property to rent at increasing rates. Families were aggressively outbid by investors offering cash. A small bungalow home that the was purchased five years earlier for $200,000 was sold to me for $475,000 (the best deal in the city at the time, but an average price for a nice home I Los Angeles over the previous several years)- identical homes in the neighborhood the following year sold for $800,000 +. Two years after that, they were going for over a $million. The same apartment I rented for $800 a month fresh out of college in the early 2000s is now $2500. It’s all due to investors. Many of them outside investors.

[@alphastratus6623]

Yes. This whole "old people shouldn't buy and rent to young people" is far off the real problem. If there are more old people try doing this move while competing to less new renters (demographics and stuff) the price would decrease, both the rent and the house prices.

[@arz3nal]

As someone trying to buy their first home in Toronto, $100,000 for a studio apartment sadly sounded like a joke, as it would be much closer to $1,000,000 (even the absolute cheapest would be more than 300k). This was a great video for me though as there is so much unsubstantiated talk around why the prices are unaffordable to Torontonians, I really appreciate this channel's well presented theories and explanations

[@ycplum7062]

I wonder if Mainland Chinese trying to park their money outside of China (can't blame them for that) is causing a housing bubble.

[@sigrlami]

That was an example of a monthly payment calculation, so you can do specific calculations for your region easily by multiplication, and more importantly, compare mortgage rates between decades. It's hard to talk about Earth in general but there are many suggestions of a "bubble" in Canada, which stands out because the majority treat housing as an investment vehicle rather than a consumption good.

[@pablomg91]

Exactly, seems like this discussion always ends in xenophobia here in Toronto.

[@ANEEAMA]

For the UK, 20% of the population is 65+, and most of this group hold houses which are almost empty. The solution is to make such houses into two apartments with separate kitchens, so that one of their kids can stay with them without losing privacy. As average kids in the UK are 1.5 which is below replacement(2.01), it is waste of making more houses and destroying the green nature. Another solution is to shift retired citizens to the countryside and rent their city houses to their kids or others, which will increase their income as well rather than keeping a big empty house for one or two people.

[@Gronmin]

​@@sigrlami It's not really a bubble as a bubble generally refers to speculation and similar factors temporarily driving up the price. What is driving up prices right now appears to be a lack of places to live, which is different than a bubble as it's a lack of supply which should gradually fall off in a healthy way and not pop like a bubble.

[@KookyBone]

I just read an article how Vienna in Austria kept their house prices and rents so low, the simple solution: the city build a huge part of houses themself - this while profit is limited and all profit must be used for new buildings... And about 50% of the houses have to be rent to low income people. And to make sure no ghettos start out of this, it needs to be mixed with people of other incomes... So the goal is not to put all poorer people in area, but always try to mix them, this is most times a good way to prevent ghettos from forming.

[@Arathreas]

Yep, that is pretty much always the key. In a new suburbia, slap down a few appartment complexes here and there, maybe setup shops around it and you have already much better cities. You know... the thing that would naturally happen if we had no city "planning". What we currently have are idiotic made up divisions.

[@ArawnOfAnnwn]

This is what Singapore has been doing for decades. It's also part of their effort to combat mono-ethnic ghettos arising too, as their policy also mandates maintaining a certain ratio of mixed ethnicities in all neighbourhoods.

[@robgrey6183]

Vienna didn't build anything. They expropriated the wealth of those who actually produce something, and used it to pay other producers to build housing. The role of the Vienna Government was merely redistributive. Their means was force.

[@ArawnOfAnnwn]

@@robgrey6183 Found the Austrian (economist).

[@-TheUnkownUser]

@@ArawnOfAnnwn Nah, more like the economist cope champion. These people can’t accept that their fairy tale is bs.

[@slavchomarinov9909]

If we assume crude oil and gas as being a necessity, as you need to get to work regadless how much it‘s gonna cost you then a 10% reduction in the crude oil supply won‘t lead to 10% increase of the price at the pump, but it might go up double. This is because people will pay literally every single extra dollar more to make sure that they are not among the 10% that won‘t be able to go to work anymore. Same thing with missing the houses for 1 or 2 more percent more people coming every year to live in big cities from smaller ones.

[@alexzanderroberts995]

A 10% increase in oil increases everything that needs to use oil to get the gas to your place. The semi costs more, the ships costs more, the production costs more.

[@Spitefulrish]

I’ve just moved away from New Zealand because the cost of living (largely housing) as just blown out of control. Housing is up to 10-15x the annual salary

[@TeresaLiam-z1o]

IMO it’s difficult to set down specific predictions for the housing market is because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.

[@LeylahCollins]

The professionals presently control the market since they not only have the essential business strategy but also have access to inside information that the general public is not aware of.

[@alex-Yolan]

A lot of folks have been going on about the bull rally and said stocks that would be experiencing significant growth, any idea which stocks this may be? I just sold my home in the BAY county area and I’m looking to remunerate a lump sum into the stock market before stocks rebound, is this a good time to buy or no?

[@Ben_Jacques]

It's gotten especially difficult since the pandemic, hence why I decided to use the expertise of an advisor, my spouse kicked against the idea initially, but oh well guess who's best buddies with our advisor now.

[@LindamartIin]

Mind if I ask you to recommend this particular Advisor you using their service? Seems you've figured it all out.

[@Ben_Jacques]

Finding financial advisors like ‘Grace Adams Cook’ who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@swiftly_produced2694]

The evolution of the house in the corner was a nice little detail

[@MoneyMacro]

and a tasty detail :)

[@aszhara2900]

Vienna is the prime example of how to handle housing. The problem is that this system works because everything else works as well. One of, if not the most effective public transport system, constant building of new housing complexes, high quality healthcare at a very low cost, (mostly) high-quality education for free, location effectively forces a lot of transportation routes within Europe to go through Austria, a country which is very rich itself, high amount of disosable income, and the politicians can't ruin it (not for a lacking of trying) because the government collapses every year due to corruption scandals. It's almost like you have to invest into society to make it work. Also, I'm pretty sure the IMF doesn't take into account the stagnating wages, increasing the cost of houses relatively to available income.

[@JustJamesDean]

is income tax high in austria?

[@aszhara2900]

@@JustJamesDean depends on what you mean by high, but except for the highest bracket, which is set way too low, it's reasonable imo

[@NoctLightCloud]

I was born in Austria and I'm glad that I don't live in Vienna. Hardly anyone outside of Vienna likes Vienna and Viennese people, and I'm pretty sure that it's only a matter of time until the renting crisis swaps over to here, as well. So there's nothing to really praise there, as house prices in Austria are expensive just like everywhere else in Western Europe. I earn 2300€ net/month and I can't afford a car & house purchase. The only folks that can afford it are those who inherit something and sell it off. The loans are crazy. I'm actually considering leaving for a cheaper country as I'm not willing to be merely renting my whole life. I want a house, as most people.

[@clockmaister]

@@JustJamesDean crazy high and progressive as well. If you own a business or are a wealthy person, you can be taxed up to 50%!!! Compare it with Czechia right next to it, where as a business owner we pay a 8% income tax! very reasonable!

[@NoctLightCloud]

​@@JustJamesDeanno, the income tax alone isn't high per se, but the overall taxation (income tax, pension tax, social security tax) can quickly amass to 40~50% of your gross income. And with quickly, I mean as soon as you earn a bit more than the average person💀

[@seasidescott]

USA: my buddy works for the water department locally and more than a quarter of homes aren't being lived in even though many homes are not listed as vacant. Just being held off the market. Banks or investment firms have the lawn mowed and minimal landscaping with lights on timers but no one living there ever. Makes it hard to fix leaking pipes when owners are listed as the obscure trust names.

[@chiplangowski3298]

It all boils down to too many people wanting to live in the same area. A house is super expensive in San Diego, Denver or Seattle. But you can buy a house for $50K in Flint, Michigan. It isn't that people can't afford to buy a house, they can't afford to buy a house where they want to live.

[@alexzanderroberts995]

It's also where I have to live. A 800-1000sqft 2 bed 1 bath house 45 minutes out from my work is still 250k-350k trashed.

[@nk53nxg]

I think you glossed over that people need to live where the jobs and employment are, theae places are usually very expensive. Sure, you can move to the sticks and become a fruit picker, but you will be so poor you would still be living in a trailer park.

[@chiplangowski3298]

@@nk53nxg - Better to live in a trailer park than be homeless. Better to live in a trailer park than to rent an apartment with hookers turning tricks in the apartment next door and drug deals going down in the stairways. There are lots of midsize towns and cities that are between a trailer park and the San Diego beaches.

[@DimaRakesah]

This is an oversimplification. It's not just that people "want to live" there for shits and giggles. People NEED to live in certain places in order to find work or be close to family. The majority of people do not move to an area for funsies, they do so out of necessity. And if workers can't move close to where they work in a city center, then the city will suffer worker shortages. Cites NEED people to live close to them, but the wealthy buy up housing and push working class people out.

[@erisu69]

I think you miss something in your discussion of the NIMBY phenomenon - I agree that the actions of individual NIMBYs might produce a collective action problem, as you said. But the wider problem is that homeowners directly benefit from a housing shortage, because the value of the property they already own keeps going up. Society is now divided between those who own property, and those who do not. One group wants prices to go up, one wants them to come down. Which one holds the most political power?

[@henriksaarno1311]

You have a really good point there

[@DemolitionManDemolishes]

I found this whole NIMBY point weak if not outright dishonest. There is an easy way to avoid this - build somewhere else. There is plenty of space for that. Instead they just want to destroy existing communities for a quick buck.

[@antoniocruz8083]

​​​@@DemolitionManDemolishesYour view is exactly the Nimby's view, build someplace else and there is lots of space. First, someplace else also has Nimbys and second, space is only available very far away from centers, shopping areas, only in difficult terrain, swamps, and in europe it just simply doesn't exist. Nimbys will simply have to share their area, hopefully with houses, not apartments. Actually in some countries, like here in Portugal, there are no Nimbys because courts are slow, people have little power and money talks to politicians. There is here a housing crisis because only millionaire housing is built, where the big profit is. Low income people are living 10 per apartment. Dangerous future.

[@DemolitionManDemolishes]

@@antoniocruz8083 Well, your own comment disproves that NIMBYs are the problem. Like you said, in Portugal there are no NIMBYs, yet there is no affordable housing. So the issue must be something else. Im not a NIMBY myself, but in this particular case I sympathise - they bought their houses under one set of rules, and now being forced to accept a worse set of rules (which wont even solve the issue like we established above). Regarding the place for new buildings - lack of "free" space to build is not actually the issue. In fact, even in places like Luxembourg there is enough space to build few high-rise complexes. The actual issue is that most of people (including "poor" people) don't want to live there. That's also why China has an issue with ghost towns - they build whole new towns, but nobody wants to live there. This means people would rather spend higher portion of their monthly income, than move out. Btw, you wrote "simply have to share their area, hopefully with houses, not apartments" - that's the thing though, Joeri is talking about building apartment complexes in places where there used to be houses. Right now you cant just buy some old houses, demolish them, and build few sky-scrappers. This is blocked by zoning laws. So developers want to change these laws, and NIMBYs push against it.

[@ronaldderooij1774]

I am a house owner, my mortgage is ending next year. But I fail to see how I profit from increasing value of my house. I live in it. It is not liquidity. My son will profit after I die, but that won't help me. In fact, many taxes are based on house value, so I pay more tax when my house increases in value.

[@IslandHermit]

I think another factor you need to look at is the lack of new rental units which forces those who would prefer to rent into the purchase market. You touched on this a bit when mentioning the push-back against high density units from NIMBYs, but very often these days those high density units are condos for purchase, not rentals.

[@pablomg91]

This is one of the reasons why rent control can make the market worse for newcomers.

[@nunyabidness3075]

Owners are rarely worried about condo developments unless they really are inappropriate. What people don’t want are people much outside their demographic becoming attracted to their area, and they do not want to worry about the ownership and management of large rental properties not being good neighbors. Finally, rental units have a bad habit of turning into subsidized units, and no one wants the government involved in their area. We bought a place two blocks from a section 8 housing complex. Before Covid, it was basically an old folks home. In fact, that’s what most people thought it was. After Covid, it became something akin to an unsupervised halfway house with parolees, addicts, and mental health patients who loitered constantly. All male between 18 and 45. Needless to say, it changed the character of the neighborhood from quiet residential families and retirees who all said hello to locked doors and empty houses. Fire and police are there weekly, now.

[@jasper8291]

Renting a house/appartment is probably only a good idea if you are a student and dont make enough money to get a mortgage for a house. Please correct me if I'm wrong

[@nunyabidness3075]

@@jasper8291 There’s some good vids on that question, and a formula that can help you decide. I made a lot of money off of my personal homes. It’s like I never paid to live in them. OTOH, one of the most financially successful people I’ve ever known never bought real estate, and always rented.

[@georgemontgomery425]

Land value tax addresses all 3 points(except for zoning) I'm pretty surprised you didn't bring it up given how popular LVT is among economists!

[@robgrey6183]

Tax, tax, tax. Then, tax some more. And then, wonder why things don't get better.

[@stevecatpatrick8056]

Please tell me how we get to there from here without confiscating everyone's wealth? That's the thing I'm interested in is someone going into depth on the transition from our tax system to a true LVT. Because any assets purchased now and earlier would lose their value in a true LVT since ultimately it would reduce the value of the land close to zero once it reached its appropriate price. That's my understanding of the benefit of the LVT. However that means that the choice to move from our system to that system would effectively destroy the value and confiscate the wealth of anyone holding land. Which is probably why I would never come to pass, obviously it would take decades to slowly move to that system and the political pushback would be massive. If we want to do it not as a tool of redistribution but as being more economically efficient we would need some sort of way to compensate the people losing the value of their land. Likely in the form of some sort of tax credit so they could still get the value lost.

[@grimaffiliations3671]

@@robgrey6183 Land value taxes are often seen as a replacement for most other taxes. So a land value tax actually reduce taxation

[@grimaffiliations3671]

@@stevecatpatrick8056 wouldn't land owners be compensated with lower property taxes?

[@ShumaBot]

​@@stevecatpatrick8056 But that IS the answer. And it should be.

[@akarayan]

You did not manage one of the main drivers of increased demand, that no one seems to talk about. That is, significantly fewer people are getting married, and the average age for marriage is much higher than in previous decades. This means where in the past one house or apartment was needed for a man and woman starting in their early 20’s, now for those same 2 people, 2 houses or apartments are needed until their late 30’s, or even throughout their lives. This nearly doubles the demand for housing while supply is restricted. Also, front yards. The worst thing in the world. Seriously.

[@kap4020]

lol, "front lawns", i.e., set backs. i have yet to see a neighborhood that adequately uses its front lawns. They just end up getting unused, collecting junk, overgrowing. A tree grows on it, if you're lucky. I think it was mostly a way to make sure density stayed low. Ironically how capitalism and socialism start mixing wants people learn they can make the rules. ;)

[@keithwollenberg5237]

He discusses fewer people per household around 4:50.

[@chronicallymeee]

Re: 13:12, I can't say anything about Toronto, but Vancouver has a very low vacancy rate and a vacancy tax to prevent vacant homes. CMHC (Canadian Mortgage and Housing Corporation) reports a 0.9% vacancy rate for 2023. Anecdotally, the only units I know of going vacant for longer than a few weeks are unsafe and unliveable, or they are someone's primary residence who is away for an extended period of time. (For example, my mum spent two months with my brother and his wife when they had their first baby together, and he lives in a different city, so her house was vacant from an outside perspective, but in no way would it be able to be long term housing for someone else.)

[@FelixRisingOriginal]

An alternative to NIMBY theory in Australia is 1) trained construction workers are less available (on the back of a cut to funding for TAFE in the 2010s) 2) cost of construction materials has risen rapidly 3) rising property prices lead to increased land banking because just having a block of land is netting very good returns (really part of speculative investment) 4) council approval rates are low, with increased problems with construction quality leading to longer time to market for new builds. Points 1 and 2 can also be seen in the very high rate of construction and development businesses collapsing in NSW Australia (some 500 companies have folded in NSW alone). Construction company collapses is a feature all across Australia

[@linmal2242]

That partly why I built my own north of SYD !

[@thecorpooration]

Being from Toronto and hearing some of the issues behind new housing development even on empty land, one other factor to consider in the overall price of homes isn't just the number of new homes being built, but the rate of change in new home construction. What I mean to say is that up until recently the municipal governments are used to a certain amount of new home construction every year and can accurately forecast city utility usage and budget accordingly through taxation and permit fees. With Canada on a drive to import 1m new people into the country every year (and most settling into the big city centres such as Toronto, Montreal and Vancouver) the municipalities are overwhelmed not just with current service expansion today, but also the sudden "acceleration" in the rate of new builds. This means unpredictability, risk, and the need to spend far more and grow services far faster than can be accurately forecast. Hence, if your municipality used to predict the need for a new water filtration system that will service the community needs over the next 7 to 10 years, now the forecast is that such a plant will need to be much larger to cover the 7 to 10 year time span and current taxpayers must finance those costs (and risks going forward) with today's tax bills and permit system. The overall increased rate of expansion and risk is resulting in a much higher rate of taxation for financing this growth and associated risk.

[@edwin5419]

"Houses are more affordable averaged over 40 countries". Yeah I don't live in 40 countries. I live in a country where the stamp duty (tax paid to purchase a house) on my house was the same as the purchase price of my parents house, which was bigger than mine, in the same suburb.

[@gregoryturk1275]

Awesome

[@pauljohnson2023]

The problem you are experiencing is buying in a now developed and probably inner suburb. Ask your parents what was 'outside' of their suburb when they moved in. You may have to visit a library and obtain photos of the area to prove to yourself it was not 'the' place to be when they moved in. Cities grow. Buy where you can afford, like your parents did.

[@edwin5419]

@@pauljohnson2023 I'm well aware. I was born a year after they moved and remember how this area developed. I can certainly afford it, I was just pointing out the absurdity of the situation. Oh and this has always been a decent suburb.

[@cooledcannon]

maybe you should live in 40 countries xd

[@danieldesp0ta995]

mortgages, monopolies and of course zoning rules are the things that most of the times are suffocating around my country

[@OritMekonen]

The real questions needed to be answered is: Is an exponential growth possible? Where does it stop? How dense will cities get before housing shortage is solved? How many people on Earth will exist all at the same time before it becomes a problem? 15B?

[@linmal2242]

@@OritMekonen Yep. But Nature bats Last !

[@savonarola831]

I live in southern germany in a very exensive city. Worked as a landscaper for around 8 years - got to know sooo many NIMBYs. My favourite one bought a huge peace of land sitting on the side of his own huge peace of land (together almost an hectar in THE best area of living) and whait for it .... Put then pots with tomatoes on it, for which i had to install an automated irrigation because they were sitting so f..ng far away from his mansion. Later he bragged about wanting to put a tiny house on it. This happened after there was some pressure by our communal government on nimbys. What the tiny house meant: lowest possible investment (with high returns regarding rent prices in my city), while - most importantly -still blocking the land for serious development. So no good deed at all (he justified by wanting to make minimal impact on the environment - did i mention his mansion and his big cars?). Called him out on this bs, he became incredibly defensive. Definetly worth losing him as a customer, haha.

[@abcdfg4281]

Gross, of course rich people only invest for themselves and don't mind squeezing the market for profits even if people go homeless

[@rutessian]

What an ass! How dare he choose what to do with his own property! The community should decide. Everyone in town should gather up and vote on what happens with his land. Just because you own something doesn't mean you have any right to do with it as you please.

[@Stoneface_]

You don't have the right to tell him what to do with his own property. That's not your business. He has the right to do whatever he wants with it. He should get another landscaper and leave you.

[@Stoneface_]

​@@rutessianhaha ikr. This "landscaper" has no right to tell anyone what to do with their own property.

[@bikeman9899]

Very solid analysis. All three of these are key. There isn't just one answer. I would like to see local authorities, at the city or county level, construct new homes themselves. These can be rent to own, as it is essential for ppl to have equity, and continue to build on it. Else social housing becomes a ghetto where no one wants to live. The innovation from Auckland and Vienna are very useful examples of regulations working positively, with accessible homes, while protecting the equity of the existing homeowners, who otherwise will act as NIMBYS. Joined up thinking .

[@GillerHeston]

I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways?

[@jcurdrayeric243]

If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.

[@rogerwheelers4322]

Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.

[@joshbarney114]

I've remained in touch with a financial analyst since the start of my business. Amid today's dynamic market, the key difficulty is pinpointing the right time to buy or sell when dealing with trending stocks - a seemingly simple task but challenging in reality. My portfolio has grown by more than $600k within just a year, and I've entrusted my advisor with the task of determining entry and exit points.

[@FabioOdelega876]

@@joshbarney114 I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?

[@joshbarney114]

Finding financial advisors like Marisa Breton Dollard who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@juusovalli9690]

Biggest problem is that houses are expensive in urban areas and almost free in rural areas which makes avarage house price data almost useless

[@shauncameron8390]

Because urban areas have limited but valuable land. Rural areas are affordable because hardly anyone wants to live there unless they're wealthy and not in need to find a job to support themselves.

[@JamielDeAbrew]

Has the ability for some people to work remotely reduced this difference? Taxpayers should want people (who don’t work remotely) to live closer to their work. Otherwise taxpayers will have to pay for more transportation infrastructure (be it additional road lanes or more public transport capacity)

[@MsJustice4ever]

Whatever the reason is, it has to stop. Our first house a 3 bed semi in London in 2010 (after the 2008 crash) was £220k. Now it’s valued at £450k. Our second house a 4 bed detached in a popular affluent rural small town (fresh air and better quality of life than London) was £380k in 2020. It’s now valued at £420k despite interest rates rising and prices supposedly going down. Of course it’s never been too easy, we skipped every holiday and worked 7 days a week, many sacrifices were made to get on the housing ladder. But without help from parents it’s now impossible for most young people. Nor is it possible for them to rent an affordable home and many end up living at home with parents. It’s not right.

[@effexon]

how many kids you had/planned to have in that first house? To put in perspective for normal family, perhaps 2-3 kids? and yes, that is only possible maybe 1/3 of couples with highest 20% jobs out there, which is bad combination. Ideally 50% to 2/3 should have this option to put it wider group of people, those with 7 kids are in very very exceptional position to handle that or very small town with inheritance and inlaws helping constantly. AFAIK in 70s and 80s yes people worked but not 7days a week to have house and huge amount of people did that. So if average salary is good vs monthly payment, higher interest aint problem.

[@MsJustice4ever]

@@effexon 2 children because we didn’t feel we can afford more and provide properly for more. We moved out of London and upsized the house because I fully expect them to not move out quickly, we potentially have them living with us well into their late twenties or even afterwards, with the current prices. We’re trying to build a nest egg of money for them to help with deposits when they are old enough and have stable jobs to qualify for a mortgage, but it’s not going very well. In the last 2 years we couldn’t save much even for our own retirement, let alone anything else. I think it will only get worse and I feel very sorry for the next generation of young people.

[@effexon]

@@MsJustice4ever yea that's what I thought, sounds very typical right now. I got first proper job almost 35yo so that makes it tough to "mature" into proper adult life. Someone having all usual things at 25 right in order is outlier. It seems smart to find way in trades not university and some other city than London/main biggest cities, then there are a bit more opportunities to get by. With university I mean in 20s can then try many jobs and perhaps even degrees but one university degree takes so long it is one shot if that career aint right for you(many people put 100% in studies and then to start career so even friendships and family etc get postponed a lot, even to 40s). I wish they didnt bring so many immigrants as then it could balance a bit over time, but now it cant(with housing situation).

[@MsJustice4ever]

@@effexon absolutely. Regarding your point on immigration, you’re right about that too. The population growth is insane, but it’s not generated by responsible native people, immigration is the culprit in most areas. Supply and demand will not allow prices to be balanced.

[@secretarchitect288]

Spot on! Last year there were almost four new arrivals for every newly built house. The ordinary person can see why there's a housing shortage but the political class ignore it whilst our small island becomes ever more crowded.

[@kenokrend4600]

Wish the video touched a bit more on how exactly zoning laws worked

[@iamagi]

Likely differ to much to be useful to a global audience

[@purelizardmilk6598]

The problem is theyre extremely specific to the locality. Other than the specifics, all you can generally say about zoning is stuff like "areas zoned exclusively for single family housing vs mixed use or high density housing". That's a whole different topic honestly

[@Arhnuld]

Honestly, when you draw a graph with 2 lines: 1. Net immigration 2. Net housing added You will see that overall, the added housing every year has been relatively stable over the past 50 years, while immigration has truly skyrocketed in comparison. In larger countries, this is even more exaggerated if you look per region instead of per country. This is because in larger countries there will still be a lot of empty homes in economically unnatractive regions. The Netherlands is an ideal country to draw this graph for. This leads me to a simple conclusion: 1. Housing supply is not to blame, since no matter how much demand there is, there is only so much than can be built each year. Even with extensive government measure, there is no way to keep up with demand. This rules out 'construction failure' as it is simply only a small percentage of the problem. 2. Indeed lower interest rates have lead to price inflation, as supply is not increased with higher prices (see 1). So financialization as a problem is correct, and can be seen as 'blowing a bubble'. 3. Speculation only works with strong demand and will further increase 'bubbling', but can be countered with government measures. And thus the cause is simply 'competition' and the only 'solution': The people saying increasing unemployment/recession is the only thing that will bring prices down are correct, since unemployment is also strongly correlated to immigration and both seem to be the strongest driving factors in demand. It's either that or prevent immigration through government measures, but just like increasing construction, I don't see that as being politically feasible as both paths will be conflicting with human rights. Change my mind please :-)

[@secretarchitect288]

In the UK last year, 190k new houses were constructed. In the same year net immigration was 720k. That's over 3.75 new people for every new house. In my opinion, this is now the main driver of house price inflation.

[@Arhnuld]

I agree. This fierce competition on the housing market in certain regions is leading to increased mortgage lending despite higher interest rates. This makes the instrument of interest rates unable to combat inflation. I think lower rates are out of the question for the foreseeable future. I think if graphs were published about the current money supply, they would be going up again. In such circumstances, another drop in supply would surely lead to another wave of inflation in the way meanstream economists measure it :) But I expect people saying this will be ridiculed by economists. It's transitory, right?

[@Whatisthisstupidfinghandle]

Xenophobe

[@RjakVegas]

The problem with well-reasoned, data-driven arguments like this is that the only conclusion you can draw is “if this ever changes, it will be decades away, and there’s nothing you can do about it, so get used to the idea of dying in your parked car as the end of retirement.”

[@keithwollenberg5237]

It's a little better than that. Once you retire and no longer need income, you can live in any part of the country, or a different country altogether. As the narrator explains at about the 5:00 mark, there could be some rural housing for which the demand is reduced. There is good evidence of that happening in many Canadian communities. So the downside is not retiring to your parked car, but to a community that is probably smaller than you would have liked, with less pleasant weather, and fewer services and amenities than you would have liked, and where all the friends and associates you have built up over your life do not live. I believe that Canadians have a reasonable expectation of better, and should demand it from their government, but it is a notch above living in your car.

[@krissp8712]

Nice to see NZ be mentioned at 7:00, very interesting result! I had no idea that had happened with Auckland density zoning.

[@Cotswolds1913]

Yea now you can find multi-unit buildings on the same street as single family homes, it’s amazing.

[@MRJP]

Some economists doubt whether the success is as big as presented, as rents prices go in cycles. While building applications have gone up, electricity connections seem to stay the same, leading to the question whether more homes are actually being released to the market in Auckland. In addition, by only looking at prices, it hides the size of the house being rented/sold. While I think there is some truth to NIMBYism hypothesis, it is also an idea developers like to push, as it allows them to gentrify and increase the value of their land.

[@laurencefraser]

@@MRJP The NIMBY issue also routinely contributes to excessive costs, or outright failures, of public transport plans in many places. It's not the only problem, but it's a provably fairly large contributor.

[@MRJP]

@@laurencefraser No one is argueing NIMBYism is desirable. The point is that the evidence that NIMBYism significantly increase house prices and zoning laws changes improve affordability is not very convincing, while Joeri presents it basically as the strongest contender by presenting it as the general mechanism behind 'construction failure', ignoring the evidence against this theory.

[@lewiswood1693]

Too bad NACT immediately removed the law labour put in that made the new zoneing rules be even broader in Auckland and apply to other city's. Their new policy allows city's to continue to kick the can down the road and has caused house prices to go up and rent prices to surge in response.

[@emilyking9558]

I was just thinking I haven’t seen a video from you in a while. Thanks for another great analysis

[@notcesr7136]

This video is incredible, thank you for making it. I’ll definitely send it to people. Have you considered doing a video on Land Value Taxes?

[@lmao4982]

It's not really a policy-focused channel beyond central bank stuff, but illustrating the relationship between land rents and speculation would be nice.

[@JamielDeAbrew]

@@lmao4982land value taxes could incentivise more efficient use of land. Also more efficient use of the resources that made any building on the land and even the labour used to make the building on the land. There’s a cafe near me that was open typical cafe hours for my city (morning and lunch). Another business organised to share the space, and run their own dinner business. Imagine if more spaces did this sort of thing. Rent could be spread across fewer transactions.

[@konserv]

There are a lot of small 4-5 story apartment buildings in Europe. With a commerce on the first floor. They're extremely comfortable - you have a nice large apartment in a district with small commerce (coffee, pizzas, barbershops, etc.). They eat much less space. And together with good public transportation you may have a nice cozy, comfortable and efficient city. Both extremes (single family homes and huge high-rise apartment buildings) are awful.

[@hpenvy1106]

A factor for Germany and possibly Europe: When my grandparents both built their own house, they had to built a second living unit inside the house for state subsidies. So you had a 2 party house which is now lived in by 1 party. Or my uncles house; once 3 parties, now just one. The rising of household wealth led to consolidation within houses, so less people are living in more space. At the same time 5 students share a flat in Berlin.

[@ImaskarDono]

I doubt so. Europe has almost twice lower living space per person than the USA.

[@hpenvy1106]

@@ImaskarDono Europoors have 112 people living in 1 square kilometer. USA has 37 people per square kilometer. So of course we have to share less space.

[@kyleid3446]

In addition to not enough houses being built, the ones that are (at least in the UK) are built in areas where they are not needed. And going from there, the reason for that is because new housing requires new transport, which for attractive large cities is either impractical and completely unsustainable (car infrastructure) or extremely expensive and unpopular with local population (rail based public transport). UK based law (UK, Canada, USA, Australia, NZ) have extremely expensive rail infrastructure, which makes expanding cities very expensive, which in turn makes housing expensive, because it's more important to live close to where you are, but density isn't feasibly because high population density makes car infrastructure impractical

[@effexon]

thats excellent summation of modern housing dilemma: denser housing means better affordability and people can live where they want (usually close to some downtown center with services) but that is tradeoff with how much parking and car infra is there, as few people can commute to work without one.... biggest cities see downtown decay coz they went with absolute no car policies there. Fine, housemom/single parent can live there on benefits and take care of kids going to school but everything else is much harder. that is rarer to happen as rents are skyhigh in downtown though.

[@shauncameron8390]

@@effexon Because Downtown home to the most prime real estate in the city and only rich people can afford to live there.

[@Danji_Coppersmoke]

#3 - Low mortgage rate to affordability conclusion is wild. Yes, monthly cost is lower but AFFORDABILITY.. well you need to consider "Cost to (income - other living costs) ratio " I think . Low monthly payment as affordability is something a car dealer salesperson would say.. lol

[@Yaotzin86]

That would make housing affordability decline if there was, say, a food cost crisis. How is that helpful? It would just misinform people about the nature of the problem.

[@Danji_Coppersmoke]

@@Yaotzin86 I am not sure I understand your comment. Maybe I should clarify that if the number "( Cost of Housing / (Income - other living cost) ) " is higher, it becomes less affordable. So if food cost more and everything else the same, housing affordability goes down since you have less money to pay for.

[@thelight3112]

Yeah lol, it's like saying a $70k SUV is "affordable" because the dealer will finance it over 8 years.

[@shane_rm1025]

It is literally a factor in whether a person can afford it or not. Unless you're buying cash, but how many working people buy houses with cash?

[@Arathreas]

Yeah the definition is just plain stupid. It says that since interest rates are low, mortgages are now affordable. That is BS. That part of the price moved into the asset price. Higher asset price, more interest to pay, just not relative to the price. I'd love to see expensive mortgages again. They would drive down prices by a lot.

[@bobbyj731]

I can't speak for Canada or Australia but, in the US Abnb has become huge and created a huge influx of investors. Investors buy up an ever increasing number of properties often using cash and out bidding the regular buyers. How does short term rentals get calculated in vacancies? These types of investments are reducing the supply for people that just want a place to live. Also, when it comes to apartments, there is a landlord rental site that is being sued by the Az attorney general for colluding to artificially hold prices higher then they normally would have. The landlords were literally told to hold their prices at a certain level and since all did the same thing the renters had no choice but to pay a ridiculous price. So things like this are playing in to prices as well.

[@parkerbohnn]

Canada or Australia the problem was and still is the Chinese shut the locals out of the housing market.

[@gregtziatzias4747]

We also need to discuss the type of properties that are being built. Here in Greece we also currently have unaffordable housing, even though there are many apartment buildings and houses being built. The problem is that virtually all of the new properties being built are luxury apartments and villas, aimed to be AirBnB’s, or sold/rented to tourists and other high net worth individuals. Therefore, the average Greek, who is quite poor, can definitely not afford to buy a house on an average, or even above average income.

[@dorkusmaximus3033]

Thanks!

[@Allaiya.]

NIMBYs suck. They're mostly boomers. I am watching a housing task force for my city that's happening this year & the letters received so far against the ideas of rezoning & more dense housing are almost all boomer home owners & lifelong middle-age residents who want to keep others out. Here are some of the comments I saw in their letters, all from suburban boomers 1) more dense housing means more dog poop & traffic 2) it isn't the cities job to ensure everyone who wants to can live there 3) Young families only want SFR - they don't want townhomes, quadplexes, or duplexes - they want a large yard 4) a lot were upset about being called a vocal minority by one of the non-profit housing employees & they don't think of themselves as NIMBYs 5) More people = more potholes (silly when you think more dense, walkable areas probably means less cars),

[@oldstix]

I'm a boomer and I agree. The homeowners in the burbs are horrified of crime and higher taxes. And of course, anybody who doesn't look like them.

[@Stoneface_]

​@oldstix everyone should be horrified of crimes and higher taxes lol wtf

[@windfall35]

Why would anyone (of any age) whose invested in a home and a neighbourhood want to support an initiative that would put their house in the shade, increase local traffic and congestion, overwhelm local services and increase criminal? Communities are planned for a reason…

[@SquarishLink]

@@oldstix this reads like an insane person wrote this. 99% of people want less crime, less taxes and less traffic.

[@Allaiya.]

@@windfall35 Except none of that actually happens most of the time. It’s just “a fear” people screech. If that was true then all European cities would be crime ridden. & where I live they already built the road infrastructure first to accommodate more people & it’s one of the safest areas in the country.

[@personzorz]

Effectively, infinite demand when prices are expected to go up by people with access to credit, getting fresh new money in the form of loans triggering a self fulfilling prophesy on the part of the class with access to credit. Housing can either be housing or an investment. It can never be both except for a short time.

[@shane_rm1025]

Corn is still food even though corn futures exist. I don't see what makes housing any different.

[@personzorz]

@@shane_rm1025 If you got the entire population to buy corn as their retirement investment because the price was sure to go up, and everyone and anyone buying long corn futures regardless of if they were involved in the use of corn, it wouldn't be food for long,.

[@Robert-un3cf]

@@shane_rm1025 Commodities are generally terrible investments.

[@DjDmt]

In the last 3 years of renting here in Western Australia, my rent has gone from 600 to 730 a week. The house itself has gone from 750-800k to 1.1mill. It's ridiculous, but like anything, the bubble will pop, maybe lol

[@leonhenry4861]

Not if the supply is kept low. Why do you think the governments purposely keep lo amount of homes being built

[@windwaker0rules]

didn't you watch the video, its not a bubble its just "lack of supply"

[@DjDmt]

@@windwaker0rules all supply shocks create a bubble, doesn't matter what market you're in. When the time comes when there is more supply than demand, that's when the bubble pops.

[@windwaker0rules]

@@DjDmt Well considering our market is used for money laundering the demand is basically infinite. Which is why you can find empty properties to squat in all over the place, i have no idea how this channel got a figure about how many empty properties we have when no one has ever done research on the topic.

[@DjDmt]

@@windwaker0rules the empty properties figures come from the census, done back in 2021. The figure is debatable though because of covid lockdowns, some people were living at other peoples houses etc, but yes, there are a lot being bought by investment firms and foreign investors. When we head into a recession and people start losing their jobs there will be a correction of sorts.

[@milobem4458]

That's a good explanation of the supply side of the equation but you kind of skipped over the demand side. The population of developed countries isn't growing naturally. The reason you even need all these new houses is the unsustainable immigration rate, including internal migration from the countryside and smaller towns to major cities. Japan has plenty of free houses in small villages but people in Tokyo live in expensive shoeboxes. Canada, US, Australia have huge immigration, and that's one of things that the governments could adjust if they actually wanted to make houses more affordable (as well as the other things you mention).

[@RobertWF42]

Something else to consider is while demand for housing increases with population growth and rural to urban migration, the supply of land for building new homes remains fixed or decreases. Big cities are sort of like islands - land for new subdivisions cannot be created out of thin air but has to be bought from willing sellers.

[@HansGrob]

It's always the same: high immigration rates in immigration countries like Canada, Australia, Switzerland, combined with one or more other limiting conditions. Counterprove consists of looking at countries with decreasing population, for instance in Southern or Eastern Europe. But don't look only at cities. Consider also the decaying houses in the countryside. Besides that, the justification 'low interest rates' must be further examined regarding the inflation. Real interest rate = nominal interest rate - inflation. If I buy a property for 1 million $, fully mortgaged at 5 %, inflation 3 %, after one year I have paid 50'000 $, but I own really only 970'000 $, and I pay only 48'500 $.

[@AdamEgret]

People dont eat their house? Tell that to all the beavers in my Toronto neighborhood.

[@gzoechi]

Beavers aren't people🙄🤣

[@AdamEgret]

@@gzoechi Says who? Have you ever spoken to a beaver? They tell me so much about their lives every time I chat with them.

[@gzoechi]

@@AdamEgret I think you mean a different kind of beavers, but those don't eat houses. What you do is very confusing🤯

[@AdamEgret]

@@gzoechi No man. Not those kinds of beavers. I'm talking about actual beavers 🦫. The only time the beavers are comfortable talking to me is after I've calmed myself down by dropping a few acid tabs. They really open up once you get to know them. Smart furry little buggers.

[@gzoechi]

@@AdamEgret I'll try that. I haven't seen beavers in this area but farmers are complaining about them and recently I even saw a tree almost felled obviously by a beaver some 500m from my home, so they do exist. I hope my wife doesn't get mad when we run out of tabs quicker than usual. I'm not sure what to talk about with beavers. Houses aren't made of wood around here🤔

[@skarscalp8157]

0:33 Most economists are trying to gaslight us all.

[@Greg_P611]

No. No they aren’t. Just because you don’t like what they are saying doesn’t mean they’re gaslighting you

[@skarscalp8157]

@@Greg_P611 %100 gaslighting. They tell us the economy is good and lie though distorted averages and worship at the altar of virtually meaningless GDP.

[@PWingert1966]

In the Condo market in Ontario, we have an additional issue. Many of the buildings that have a high number of empty units for sale also are older buildings with higher fees. This tends to cause buyers to gravitate instead toward newer buildings with lower fees. The result is that those older buildings tend to sit on the market for a lot longer. Most freehold single-family dwellings that are not condos do not have that fee built-in and instead must be estimated by the purchaser and they often assume that the maintenance can be pushed down the road.

[@brian13105]

The HOUSE loses value , the LAND is what increases in value .

[@christopherdamiano4233]

Great video, I have done quite a bit of research on this and I agree with your conclusion. Restrictive zoning and obstacles to building (NIMBYs) are the key issue with the current housing market. The other factors certainly play a role as well though.

[@mhpereir]

I don't know if the "excessive speculation" accounting was done correctly. If a secondary property is being rented in the short term with Airbnb for example, that would classify it as "occupied", when in reality it isn't... vacation=/=living. You would need to look at second/third+ property ownership, instead of vacant housing, in order to look at investment properties in more detail. A lot of cities in Canada are pushing back on short-term rentals in major cities, exactly because this has been identified as a significant slice of the problem ...

[@bandqpine1690]

amen , this is taking up a huge percent of the market, and in a market of tight margins, 5% allocated to short rentals or vacay homes can kill an area

[@Yaotzin86]

Why isn't that occupied? Short term housing demand is real too.

[@lmao4982]

@@bandqpine1690 sounds profitable just build more homes

[@rupertvass8793]

@@lmao4982 because having housing as short term rentals means it is easy to sell as you don't have to deal with renter protection laws, and also over the same period of time a short term rental will cost more as for example people will spend more when going somewhere for an emergency or holiday

[@lmao4982]

@@rupertvass8793 yeah just build more

[@rogerwood2864]

Airbnb allows people who already have money to purchase multiple "homes;" which are effectively taken off the market and do not act as domiciles for local residents. There are currently 622 Airbnb rentals in downtown Vancouver alone. There are over 10,000 in the entire lower mainland (Vancouver, Burnaby, Richmond, etc). Extrapolated over every city in the country and you can see how the housing problem was created.

[@estycki]

I searched if anyone had a decent explanation of why housing is so expensive _world-wide_ not just local finger pointing... your video was the only one that attempted to explain it as a world-wide phenomenon. You have earned my subscription today. The thing that baffles me is when everyone says there isn't enough homes, but we know China had a surplus and they were still unaffordable.

[@daviddelgado6090]

An additional element is wages have not kept up with the cost of living. In the US the national minimum wage has not changed since 2009.

[@philipberthiaume2314]

Thank you for this video. Housing starts in my city are up significantly in 2023, including the transition of post covid commercial/office spaces into residential. Which is convenient as a lot of it is near public transit hubs.

[@joshjhoward]

Coming from the prospective of someone who's from the USA, NH to be more precise, I would say it's a combination of all your points. After the financial crash in 2007, new construction dropped like a rock and to this day it hasn't fully recovered. A lot of people who worked in that field lost a lot and had to shrink their businesses, some left completely. NH seems to be making some good decisions and is working on developing mixed use developments in certain parts of the state, but much of the construction is behind schedule because of the pandemic. Also, with a shrunken construction force you can only build so fast. Another problem I see with the housing in my state, which is a problem for most of the world too, is people see housing as an investment. It doesn't do you any good to have a home increase in value if you have to buy an equally overvalued home. It only benefits people who are wealthy enough to own more than one home. The last problem was having lower interest rates during the pandemic which caused homes to increase in price way too fast. Interest rates were lower which allowed people to place higher bids on homes and refinance their mortgage but now that interest rates are higher, it's causing people to not sell, which decreases supply.

[@CollectorWorth]

Construction is also a lot more difficult for one, a lot more people are divorced or single these days and almost no one wants to live with there parents so by just labour numbers it's a lot more difficult to keep up. When you had most people married one person was needed to build a house for two or more people, now we have a lot of one person condo buildings and no one really mentions that. Also as someone who's worked in construction for 15+ years the level of regulations and new more expensive building requirements is a lot. New houses need $50-100k more in extra things like insulation, heat exchangers, arc fault breakers, fire alarms, 2x6 framing, etc. and that adds a lot of tax. Another cost is the fact that 30% of a new home cost is taxes and fees. Your average home in Ontario Canada is $300k of just taxes. And lastly the homes built pre 80's aren't in good condition any more. I think before that it was easy to build because everything was new construction but now there's a lot of people dedicated to just remodeling/rebuilding older houses. Side point is the fact that no one wants to do construction any more, here one person is joining construction for every 7 retirees

[@CollectorWorth]

also vacancies in canada are sub 2% in some areas. almost all cities are below 5%. that's with all the money laundering in the canadian property market

[@regieegseg8588]

Can you explain why no one wants to work in construction in canada?

[@CollectorWorth]

@@regieegseg8588 because people thinks it's a bad job or they're told to 'do something better.' people literally make $100,000's running construction businesses and even as an employee the pay is really good. When I was in University people thought it was funny I worked in construction and a lot of them asked me why i didnt get a 'better job' when all of them were stepping on each others throats to get $17 an hour jobs(graduated com sci). Everyone thinks it's a lot worse than it is and no one wants to join

[@robgrey6183]

@@regieegseg8588 Scary power tools. Mean bosses. Can't spend half the day playing with your phone.

[@regieegseg8588]

@@robgrey6183 interesting. may be pay is shit?

[@TheEvdoggy]

@12:22 Why would we look at home vacancies as an indicator of speculation? Speculators can buy up properties and rent them out using tax incentives to profit in the short term until they can realise the long term asset price gain.

[@Nick-bn6ch]

I personally would like to see homes be more of a consumable good, mixed use zoning, and reduced building codes (at least In rural areas). So that If I want to live in the city I don't have to go into debt to do so, increased density at least being an option would lead to lower prices and more walkable cities, and if I want to build my own house out in the country, the government won't come tear it down for some technicality

[@techcafe0]

Housing and real estate markets worldwide have been transformed by global capital markets and financial excess. Known as the financialization of housing, the phenomenon occurs when housing is treated as a commodity - a vehicle for private wealth investment and enrichment through profiteering - rather than a social good.

[@christineblaas]

I‘m wondering why never ever somebody talks about this. I‘m sure the IMF is fully aware of the big private equity companies and hedge funds that have moved from commercial real estate into housing some years ago, when they have not been able to allocate their money to real estate anymore because of nut sufficient opportunities and a ‚wall of money.‘ Prove of all this is that they turn empty office buildings into homes since COVID.

[@lmao4982]

I think it would have been helpful to highlight how the speculation and unaffordability is driven by the unique properties of land (supply can not respond to demand, land/location is necessary for productivity etc). Not to mention how the land costs will always rise as society grows richer and has more money to bid with, while the amount of valuable locations does not. Also this is pretty much exactly your distinction between a financial/consumption asset. The portion of a property's value that is the house itself depreciates, while the land appreciates.

[@Yaotzin86]

It's not really true though. Supply can respond to demand by building up. The problem is Anglo countries mostly made that illegal, or heavily constricted in various ways.

[@lmao4982]

​@@Yaotzin86 Housing supply can respond when the regulation/situation allows. But land itself, as an input, can not. When developer wants to build 'up', they will still have to acquire the expensive land, and that cost will still pass on to the buyer/renter in the end.

[@root_314]

If you aren't a Georgist already, you might like to look into his work.

[@Yaotzin86]

@@lmao4982 Yes but when most of your city is covered in single family detached homes - as almost every city is, just take a look at them on Google Earth for example - you don't have a land problem, you have a failure to utilize the third dimension problem.

[@Michael-pg7rv]

In Canada it is quite simple. We are not building houses at the rate that we used to while at the same time our government has immigrated 2M new people over the past 3 years. We were already in a housing crunch and this tipped us over the edge.

[@paulbuchanan7781]

The ratio didn't go down in Auckland because of the zoning changes. All the zoning changes have resulted in is mini-suburbs of townhouses popping up in the outer regions on the fringes of farm land, nowhere near transport or business hubs. The inner suburbs populated by the wealthy are largely untouched. Affordable family homes on the outskirts of the city are being replaced with several much more expensive townhouses without the required infrastructure to support the increases in populations. All of these new developments are significantly more expensive than the housing they're replacing. The zoning changes came in the same time as: 1) Interest rates going up. 2) Government removed landlords' ability to tax write-off upkeep costs and even the interest on their mortgages 3) The government introduced a 'bright-line' where if a property was sold within a period after buying it, a capital gains tax would apply (the closest thing NZ has to a CGT). 4) Immigration practice changed and immigrants were heavily incentivised to settle outside of Auckland 5) Auckland had become so unaffordable and undesirable many people were moving to other cities like Tauranga - driving their prices up 6) New Zealand has become so unaffordable and undesirable we're now seeing record emigration. Simply put; Speculation became less desirable. Maintaining a rental portfolio became less desirable. Demand for housing in Auckland slowed down. I'd argue zoning had very little to with it. I would go as far to say the changes exclusively benefited developers, and the changes were likely introduced specifically for this as many of our politicians and high level public servants are stake-holders and beneficiaries of the real estate industry.

[@jimalbi]

I live in Canada. Half a million in immigration last year. Decent appartments with reasonable rent have become difficult to find so people jump on houses and condos since rents and mortgage payments are pretty similar.

[@ye_zus]

Nice video, interesting to see NZ's context mentioned. A couple of points that weren't discussed: Other changes in NZ laws also contributed to lowering/halting rent increases: - Removal of interest deductability for landlords (meaning interest could not be written off as a business expense), although this has been recently reversed by the new government - Restricting amount of annual rent percentage increase and only allowing one increase per year - Easier rental contracts for renters plus removal of no-cause terminations Also one thing to look out in that graph is that it is a ratio between income and rent. Do not be fooled, rent has not fallen in gross. And Auckland is not the region increasing its supply the fastest (that would be Canterbury). In fact the graph most clearly says something about wages, not rent prices. It shows that Auckland incomes are growing faster than elsewhere, rather than housing supply being expanded.

[@evolvedape3341]

I think a big part and only briefly mentioned in the NIMBY conversation is the issue of affordable housing in certain places. If you want affordable housing, you can find it in “flyover” country. The problem is, is that people want everything. You can’t live in the most expensive places in the world and then complain it is too expensive.

[@Frostbiker]

People want to live in the place where they can find a job? The audacity! What will they ask for next? Access to a doctor and a school for their children?

[@Yaotzin86]

Many poor people in fact used to live in the most expensive places in the world, because that was where the opportunity to become not poor was. The latter part remains true, but the low cost housing they need was largely made illegal to build.

[@evolvedape3341]

@@Frostbiker Did you know that - GASP! - people actually live in flyover country! Wow! And they have jobs! Amazing

[@evolvedape3341]

@@Yaotzin86 Very true. I just find it difficult when I hear people who live in LA complaining about the cost of living after moving there for the weather. Yeah, I mean there are lots of issues, but I’d love to live on a mountain ski resort until the cost of it comes into play.

[@TheAgentOfDeath]

Worked in Construction in the U.S. The issue is that the U.S government has put little to no investment into the construction sector (everything is going towards finance & military). The construction industry is either mega corporations or small and Mom & Pop Shop. And it's the Mom & Pop Shop construction business which works mostly on houses have very low profit margins something like 10% its sometime less or sometime even more. The small business work on [fix price] contracts meaning they take on the entire risk in case it goes over budget which can cause some of them to close down. With large construction companies they work [time and material] contracts meaning if they go over budget they can just charge more. The government really needs to help out the small business because they are the main one working on houses.

[@PnCBio]

This is the most coherent argument I’ve heard about what has happened with housing. Thank you very much for doing the hard work. Very happy I came across this! Subbed

[@SeanEustace-zk3mc]

We lose housing units at one percent a year in the United States. The house I live in is over 100 years old and has been reframed in the basement is more solid than one you could get made today economically. We have a house a few towns over from me and Dedhám mass that was built in the mid-1600s and is the oldest house in the country. But as a general rule, they last 100 years and that you have one percent a year shrinkage so if you build one percent of the housing units that are total today in a year, you will end up maintaining the housing numbers indefinitely, not rising or falling

[@zxc232]

You cannot compare mortgages on a property at two different times without adjusting the amount! In your example, you compared a $100K mortgage for 30 years with different interest rates. But the average mortgage you need to take now can be 3-5 times that. For example, in Israel, it has almost gone up by 4-7 times compared to 20 years ago! Our parents got a mortgage of around $50K and paid it off in 10 years. Now we need to take a minimum of $250K mortgage for a two-bedroom apartment for 30+ years (based on average family income).

[@markferguson7563]

The innate crux of why properties in Canada, and Australia - and, this is also true for England, as opposed to Britain; likewise with the US, too - is irrefutably due to one factor, and that is buttressed in large-scale immigration programs. This is then exacerbated with supply not keeping up with demand. So, all of the other aspects, which are espoused by the host and, indeed, with all those people posting comments regarding this, that or something else (although certainly having validity) is ostensibly just waffling on in a sea of self-serving semantics. Because in any of these jurisdictions that are fully dependent upon fueling their GDP’s via importing consumers, if enough properties aren’t constructed to cope with demand, then the dire side-effect is OVER PRICED properties. David Ricardo and, particularly with Henry George, were theorizing and espousing comments and, indeed, warnings on all of the negative nuances impacting real estate prices. Apropos to Henry George, way back in 1881 - two years after his book, ‘Progress and Poverty’ was published he told a senate hearing during the Garfield administration that: “The overt essence of why property values should in crease is a result of productivity, and not speculation.” Alas, here we are over 140 years after Henry George wrote ‘Progress and Poverty’ and, also, 207 years since David Ricado wrote the ‘Law of Rent’, we have politicians and captains of industry in Australia, Canada, Britain, and the US who missed reading their perspectives. But there is a far, far greater detriment to consider for all of these nations that have implemented large-scale, and, moreover, non-discriminatory immigration schedules. And that is to ponder the severe sociological impairments that will come to bear upon these societies being fractured on race, culture and, worst of all, religion. Quite simply, immigrant groups from non-Anglo/European and, more so, non-Christian cradles have been over the past 20-30 years that they have become culturally insular colonies/enclaves. Thus, it’s only a short time away before these groups organise against these societies in their own parliaments. To garner this pending horror most assuredly comes to pass in Britain, with hundreds of thousands of Muslims rallying in pro-Palestinian, and anti-Israel rallies from the middle of October.

[@nicktw8688]

@@markferguson7563 Oh brother. Get over yourself. Canada, UK, Aussie....are now multicultural societies. It's not the end of the world, but the beginning of a new one.

[@markferguson7563]

@@nicktw8688 - You gloat about Canada, the US, and Australia (already being) multicultural, and how I should get over it: because this is the beginning of something new and, no doubt, in your mind an idyllic, cultural utopian menagerie. Well, first of all, apart from immigration engendering an array of cuisines to savour what, pray tell, is of note - and CERTAINLY NOT of any significance - to the host societies? Ahh, gee, I almost forgot (sic), those boring song-and-dance routines that you occasionally witness them performing. So again, apart from either of those aspects just mentioned, what are the great elements that immigrants from non-Anglo/European cradles bring with them that will magically “enrich (the host county’s) cultures?” Well, that, of course, is intrinsically contained within the corridor of what they, ‘may’ contribute in any sphere of the workforces. Alas, the facet of working and, therefore, contributing to the GDP of a society, is now clearly diminished. Because in all of the 10 Western societies, which have taken in significant numbers of asylum-seekers from the Third World and offered them refuge all of the TEN are fettered with the great majority of these interlopers parasiting upon the host country. This certainly prevails in Britain, with how more than 90,000 asylum-seekers (almost all of them being able-bodied males who are no older than 35) who have invaded the country, over the past 4 years, have NEVER worked for more than a few days at a time. And when they do it this ostensibly entails being employed by a local council to undertake really menial tasks: such as attending to tidying up parks, or cleaning up abandoned, and dilapidated buildings. For their efforts, they are paid 25 pounds per-hour: yet, this money paid to them, doesn’t affect the welfare payments, and free-lodgings that they have been granted. Apropos to the free-rent they have I direct you to watch Paul Thorpe’s, KZbin from today, May 8, titled: ‘You Need to Leave: Sinister Asylum Hotel’ Upon doing so you will become aware that these interlopers are pampered reprobates who parasite on the British taxpayers. But the most detrimental element to highlight to you poor deluded soul to expose how immigrants from Muslim societies have emerged as being dangerous to Western liberal societies. There are many articles, and You Tube broadcasts to consult to fathom the immense impairments that Islam poses for non-Muslims. Amongst them are: ‘British society will pay a price for tolerating extremism’ the Telegraph, Oct 31. Ex-Muslim: This is a difficult conversation. Why you can’t criticize Islam, Sarah Heider, from Trigonometry, in June/23, and, in the Fox News story from Nov 1. And also, with Ayaan Hirsi Ali from Nov 1, titled: ‘We are going through a moment of crisis’ In the latter story, Ali informs Martha McCallum, and the viewers of her upbringing in Kenya, telling us how when she was in the Islamic school (the Madras), the imams instructed her, and, indeed, all Muslims that they must hate anyone who doesn’t submit to the teachings of Allah. In that interview she states: “In the mid-1980s, we were told the Muslim Brotherhood gives a purpose. And that purpose was to hate the infidels and the Jews. And our main reason for being here was to conquer infidel lands and kill them.” Needless to say, anyone with a modicum of awareness is blatantly cognizant of how Islam is a religion stuck in the Medieval period of time. Once more, a primary tenant of Islam/the Koran is that non-believers must convert to Allah’s teachings or be eradicated.

[@jokecaproens2272]

Thank you for your presentation. 👌

[@gregchijoff9959]

Going off the Gold Standard in 1971, easy credit, endless money printing, and mass immigration and a collapsing home building sector will do it every time. Greetings from Australia!

[@clairegougeon5186]

Well said! But what I don't get is the building part... if the price of a home doubles in 8 years, what is more worthwhile than building more houses? Like, what more incentive do they need?

[@r-gart]

​@clairegougeon5186 it's not the price of homes going 2x. It's both a combination of the currency going down constantly and the value of the actual land being maintained, not the house on top.

[@gregchijoff9959]

@@clairegougeon5186 I think getting rid of negative gearing offsets for tax will help. Builders costs have risen dramatically, whilst fixed-price building contracts locked them in to a crippling end point - administration or bankruptcy. In addition, sanctions on cheap engineered plywood (and that included I-beams) from Russia and Byelorussia means expensive imports from the USA. Much like Europe is finding out with overpriced USA LNG. 🙂

[@amac2612]

one of the problems in australia is that in the cities you are given two options., take it or leave it. A shoebox 2 bedroom luxury apartment with all the trimmings in a 57 story apartment block for 800,000 or a car orientated detached family house in a culdesac with no ameninites 62km away from work for 900,000.

[@oliveelephant]

I'm 35km from the Sydney CBD and the average house price is about $1.5m. And truly nothing's selling here below $2+m. It's mental.

[@krolldavid]

Great summary. This is the best video on the topic from an economic viewpoint that I’ve watched. The only thing I would like to add is that NIMBYism was perhaps not the starting point but actually an inherently conservative planning system, which has been created to protect the character of places. An understandable aim but of course it is not good for new construction.

[@Blipblorpus]

I’m surprised you didn’t discuss first time home buyers!

[@Kalarandir]

I am going to go with it's a combination of a lot of differing factors. It would also have been interesting to have seen a comparison of housing as a percentage of household income.

[@TheSimArchitect]

That affordability only applies to 2 income couples with access to a mortgage. If you are single and self employed you are locked out. There's lots of houses available, no shortage if you aren't looking for the cheapest 20%. Here the major problems aren't NIMBYs but environmental policies and lack of cheap labor as too many people have degrees and want intellectual work instead of physical labor. It's also much more profitable to gentrify than build additional homes and see not only houses fall in price but taxes go down per unit while cities have to serve larger populations. Houses and other essentials getting increasingly expensive force people to work. Devaluation of personal savings too. Inflation numbers are inconsistent because they aren't based on essentials consumed at the bottom tier, by a single person, without replacing beef with chicken, then with eggs, then with beans, or families of 5 on a single high school income being graduated replaced by 2 income couples without children. Before you could get ahead by making "right choices". A degree, frugal living and delaying having children, maybe living with your parents until you were in your late 20s was enough to allow you to buy a detached house with a garage with hard cash. Sorry for sharing my negative perspective.

[@anastaciaromanova8202]

There are a couple of things missing here 1) the first mortgage payment is roughly the whole price of a house say 50 years ago (comparing to an avg income) 2) pure incomes of the firms involved and huge personal ibcones of c-level officers, which do not depemd on the sales at all

[@hudsonb631]

People moving from the countryside to cities is not really a thing in Canada/US/Australia. That's more prevalent in developing countries.

[@Mattb81]

Exactly. Here in Australia people are moving out of the capital cities to the smaller regional towns & cities. The only reason the big cities are still growing is immigration.

[@Zed_Oud]

*Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy* (1879) by Henry George #2 best selling book of the 1890s worldwide. LVT would have made this all a non-issue. Instead we got property taxes, because the only ones with more influence than capitalists are landlords.

[@trunkage]

In Australia, Negative Gearing is a major culprit. When they tried to get rid of it, house prices went down 20% and they repealed the law

[@ThePolaroid669]

It never became 'law'.

[@nonexistent5030]

Your conclusion seems overly dependent on the decrease in building since 09. If you look back since 2000 the building has kept pace with population, AND household formation. The vacancies of the 2000-2008 period were indicative of overbuilding. Makes sense for building to slow after. In discussing vacancy, You also don't address the issue of the Airbnb phenomenon, now while this could suggest there is a preference for alternative uses of housing as leisurely residence, it could also be interpreted as an increase in speculation, this is probably unknowable and will only become more clear as it remains to be seen if this travel boom is sustained. There are plenty of housing units. But many have been siphoned out of the pool of permanent residency for temporary residency.

[@mausklick1635]

Yeah, he doesn't even justify why he picks certain theories over others.

[@Yaotzin86]

The way people talk about short term housing demand as if it isn't legitimate is weird. If short term housing demand is providing too much competition to long term housing demand, the solution is to build more housing, not crack down on Airbnb or something.

[@lematindesmagiciens8764]

Good point about Airbnb that are popping up everywhere. A landlord that wants the best return on his rentals obviously can make more by using Airbnb. So this will eat up a portion of the available rentals in a city. Don't you think this would affect mostly more touristy areas?

[@SeanCSHConsulting]

The building has most certainly NOT kept pace with population. Try again. AirBnB is a strawman.

[@rupertvass8793]

@@Yaotzin86 short term housing is not housing, it doesn't have people housed, they are effectively just hotels

[@jevgeniardassov]

Eastern European here. My monthly salary is almost 3X of natuonal average and I cannot even dream of a House. I can afford an average square meter for my monthly salary, it means average income gets you 0.3 square meter. Which is mind blowing… 🤯🤬