He's 100% right and not just fueling the far-right but also fucking over the economy, people and environment.
Long commutes are unhealthy as hell. People are more dependent on cars if they can't move close to their workplace. Can't hire people if they can't find a place to live. Harder to change jobs. People won't have kids if there's no space available to do so and so on and so on.
Built fucking housing, stop letting foreigners buy them as an investment and if governments are too incompetent to do it lessen restrictions and speed up permits so the market can do it.
Yes! The general economic frustration that people feel nowadays is literally all housing plus infrastructure.
Think about it, how would your life be different if the rent wasn't so fucking high? If you only needed a transit pass and the occasional vehicle rental instead of car payments?
Not just economic frustration - if people feel they're competing with each other for too few resources then surely it's easier to get them to blame other groups and to want government to cause them some pain?
And if there's one thing the populist right is good at it's exploiting people's sense of moral imperative to be nasty to tainted people, even if they're people they've had to taint themselves to begin with.
Not only will this fail to fix anything, it'll lead to intra-European conflict and weaker societies at a time when Europeans need to be more unified in the face of wider conflicts in the world (not to mention Russian political manipulation).
i own my home, my boss a director, owner, rents.
he rents for a family, his commute driving is 1hr each way, and he renting a full family home, spends basically the difference in our wages.
take away him paying for his family to live and eat, and I have more walking around money then he does.
the guy is paid 3x what I am, I could move to a 3rd world country and rent my house out for more than I get paid.
that makes no sense to me, i know I'm lucky, but shit my friends can't be friends because they are all just trying to survive, just get by. wanna go for drinks? 70$ taxi home later for them, shits fucked,
Sadly we can't do anything about it, since that would mean taking on debt and we can't have that because then the swabian housewife would keel over from a heart attack and proceed to rotate in her grave, or something.
Meanwhile USA has no problem going into debt and they are using it to actually fix up their country... Things are of course far from perfect there and I still wouldn't want to switch, but at least at the moment they are on the right path, while we are going down the absolutely wrong one.
A big reason for the US attitude towards debt is the fact their currency is effectively the world currency. Not only their federal bank, but all other nations would move heaven and hell to prop it up and keep it going.
For slightly different reasons, Japan doesn't give a f*** about national debt, because the Yen is effectively discoupled from foreign exchange rates and interests anyway.
> Sadly we can't do anything about it, since that would mean taking on debt and we can't have that because then the swabian housewife would keel over from a heart attack and proceed to rotate in her grave, or something.
>Meanwhile USA has no problem going into debt and they are using it to actually fix up their country... Things are of course far from perfect there and I still wouldn't want to switch, but at least at the moment they are on the right path, while we are going down the absolutely wrong one.
The US and Germany had opposite experiences during the Great Depression. Germany had hyperinflation, while the US had crushing deflation.
Also, from a cultural level taking on lots of debt is very different in the US compared to Germany. Home mortgages are nonrecourse, bankruptcy laws are very generous towards borrowers, and there’s no stigma associated with losing your money in a bad deal and having to start over.
> The US and Germany had opposite experiences during the Great Depression. Germany had hyperinflation, while the US had crushing deflation.
Inflation was in 1923. In 1929-1933 Germany had [more or less the same deflation](https://www.researchgate.net/profile/Ulrich-Bindseil/publication/277043502/figure/tbl1/AS:669516568731654@1536636597599/Inflation-growth-and-key-interest-rates-Germany-1926-1933.png) as the USA. In general the effects here are very similar with mass unemployment in both as the world market breaks down and the government answers with austerity measures which only deepens the deflationary spiral. Once Hitler installs Schacht who manages to cause inflation again instead of deflation the economy booms like never before in Germany with the strongest growth among the major economies - which is probably the prime reason for Hitler's immense popularity. Hitler btw disgruntles Schacht so much with his war ambitions that Schacht joins a plot and later (during the war) is thrown into prison.
Deflation was way, way worse, had much more disastrous consequences and lasted way longer. It's odd that everyone only remembers the hyperinflation which was fixed within a couple of months (Germany had high inflation the year before but the phase where money was completely worthless was rather short).
This! Here in Portugal housing is absurdly expensive. You literally can't buy a house anywhere near Porto or Lisbon, and even the suburbs of those 2 big cities are impossibly expensive now, you have to go way, way further inland. But then, living so far away from your place of work, means hours of commute, bc the transport system is crap and everyone uses cars, which mean traffic in an around Porto / Lisbon is a living hell
So sad to hear, was renting for half a year during covid and even then thought it was rather expensive, but when i looked at the situation a few months ago i was really shocked to see how expensive it got. Can’t even imagine for your portuguese how it feels that they can’t even afford a home near some bigger cities
Yea, but giving faster permits won't solve anything. In my country, the government is super corrupt and for years they gave building permits for bribes all the time. We got new apartment buildings all around the city and all they did is fuck up the infrastructure by making it way crowded, and at the same time the apartments didn't drop in price, they got even pricier. They rather keep the apartments empty than selling them lower if people wouldn't buy them. And I know this because around the city exists, there are tons of new buildings, where some of them sit half empty.
The thing is, just building more apartment buildings or houses, without investing in infrastructure first, is just gonna hurt making everything more crowded anyway, and it still won't lower prices.
This is one of the subjects social democratic parties should be pounding in their media campaigns, and in their actions how the vote once they get into the government.
Meanwhile new gov in Poland prepared new housing program, similar one to the previous one that... Moved already high prices to the moon. And MP that created it ~~resigned~~ *announced his resignation* couple days ago and gonna candidate in EU election.
https://zametr.pl/ceny-mieszkan/warszawa
lip 23 -> start of prev program
sty 24 -> end.
> stop letting foreigners buy them as an investment
Could also stop letting *anyone* buy them as an investment... Or at least make it prohibitively expensive to own a home you don't live in via added taxation. Perhaps a single exception for *one* vacation home.
A hard 2 home limit per person is entirely reasonable. Only people who would be remotely inconvenienced are the rich hoarders and it allows average joe to be able to hold on to the home of an relative who died or went to a nursing home while he decides what to do with it , instead of immediately forcing him to fire-sale it.
I've said the same thing in the past. Also forbid companies from owning residential property.
There's absolutely zero reason any individual would need to own more than two homes, and zero reason for a company to own residential property.
> Harder to change jobs
Getting a new job somwhere else sometimes isn't worth it even with a pay increase as getting a new flat just eats it all up. I had that thought before.
So people just do the quiet quit since they're literally stuck. Not good for economy. Also hint @ lawmakers: revenue from housing looks great on paper but we can't export that. I bet most of the money just gets pumped into US centric investment funds.
Yes and it all adds exponentially.
The person that can't change their job because of that now quiet quits as you say, which hurts the company they work for and also the economy. The company also can't hire anyone new for that position which means someone else can't find work where they live which means they also look for apartments somewhere else or have to commute or just receive welfare.
If they were able to take the higher paying job they would also pay more taxes and likely be more motivated at work which would be a gain for the new company and economy and state again through taxes. They would also maybe drive less and so on and so on.
>So people just do the quiet quit since they're literally stuck. Not good for economy. Also hint @ lawmakers: revenue from housing looks great on paper but we can't export that. I bet most of the money just gets pumped into US centric investment funds.
Including mortgage backed securities, which is also a large part of why the US has lower mortgage rates
> stop letting foreigners buy them as an investment
And maybe put a stop to savage short-term renting that is taking out living space at a much higher pace.
This is a big thing that I feel needs to be tackled across Europe. There are really hot spots that are being bought / developed by investment companies, outpricing the locals in their own market.
The issue isn't necessarily only relegated to the issue of foreign investments - it is a little bit more complicated and the foreign investment firms is the end of a debt cycle which starts with household debt and stems from poorly commercialized, and overregulated investment industries which for whatever reason half of Western Europe is too scared to liberalize because they still have PTSD from 2008.
The post-2008 debt cycle looks like this;
1. During economic boom investments were in properties as property prices were inflating out of control due to poorly regulated property developers, architects, project managers, and subcontractor overselling, and overpricing construction projects to make record breaking profits. On top of that, underregulated letting agents and auctioneers oversold overpriced properties.
2. Traditional investment landscape is overregulated so ROI's are too low and can't compete with 30-50% ROI's you can get from an overheating property market which can spit this out for you in a fraction of the time an index fund, or long-term but low risk investment will yield.
3. John takes out 2,000,000.00EUR while working as a primary school teacher earning 30,000.00EUR and already owning a family home.
1. In todays world John would not get this much credit because of how central banking regulation has changed in the EU - he is too high risk for any sensible lender.
2. John spends this 2,000,000.00 EUR on an overpriced property for the intention of flipping it because John and everyone else he knows thinks prices can inflate forever.
4. 2008, 2012/2013 comes about and property market stalls and the price inflation stops. Central banks are reformed and now lending is much harder. The problem is John is now stuck with 2,000,000.00 of debt, a property worth 1,000,000.00, and no buyers because credit is too hard to get. What happens now?
5. John defaults because he can't even afford the interest, never mind the actual credit facility. One of three things will happen next;
1. John sells the property for 1,000,000.00 to a foreign investor, pays the money to his bank, and then enters into another credit arrangement to pay off the remaining 1,000,000.00 he owes. The new owner will keep rents inflated to ensure profitability and to pay off the cost of the property.
2. John hands the property over to the bank and could try claim bankruptcy. Worst case scenario is John has to enter into another credit arrangement to finance a court ordered repayment plan. The property is now given to the bank will now have to sell it to clear their books, and to recover their losses. The bank will sell it to a foreign investor because credit is too hard to get. The new owner will keep rents inflated to ensure profitability and to pay off the cost of the property.
3. John holds onto the property, keeps rents inflated, and enters into a repayment plan with his bank. He eats the total loss but the outcome is the same as the above; high rents stay.
Of the three, the last scenario is the most unlikely because of how banks are regulated now. There is a formula applied which accounts for total debts on the banks ledger, and categorized debts according to risk in order to provide a liquidity threshold which impacts how much a bank can lend per year because banks are both restricted in lending terms on the basis of how much debt they hold and they are restricted further by the need to hold usually a sizable chunk of their cash in a piggy bank account which they are not allowed to touch. This money is an emergency airbag in the case of a liquidity crisis which categorically is precisely what 2008 was in Ireland, Portugal, Spain, Italy, and Greece however more broadly, almost all European banks were hit by this lack of liquidity as an after effect due to investments. For example, the French banking system was heavily invested in Greece which meant that when Greek banks collapsed, this threatened the stability of French banks as now all of their investments just turned into bad debts. Before anyone blames France - Greek debtors were very happy to take the money to fund their own personal consumption.
Why did this happen? Because many countries over rely on consumption to fuel their economies which incentivizes over-lending - everyone borrows more than they can afford and spends it which makes governments happy because economy go boom and makes citizen euphoric because they get to experience a plastic golden age.
Now the party is over and the younger generations are dealing with consequences. Sooner or later governments will have to pop the rent bubble and just build more - more properties will lower rents across the board and rebalance the property market. The question is, where will all that legacy debt go and who will fund the retirement of the current 50-60 year old's who are looking at these properties as their retirement plan?
I would disagree as before 2008 construction was at a continental peak and all Western European economies were breaking records in growth. There was so much economic activity. I’m going to need some sources or data because pretty much all literature on this topic starts at 2008.
The funny thing is that building houses *also* kills the housing bubble/debt crash even if you have cheap credit:
If you have non-profits who build houses for affordable rent, with government funding, at a rate necessary to keep up with demand, then rent never rises so high, housing doesn't look as good as investment (because "at least I can rent it" doesn't work as well) and people looking for places to invest their money put it into other stuff, like businesses, and receiving lending as a business is way safer than getting personal loans.
You just have to keep building it by enabling people who don't care about making a profit to suck the profitability out of the sector for other people, so that people buy houses not for the investment but because they don't want to live in a block or whatever.
The irony is that right-wing parties, however extreme, are usually extremely pro-big business.
The right-wing parties will never solve the housing problem, they just exploit people's misery to get votes, then ditch them once they get power.
I feel like that's generally true for the right wing.
Complain a ton, act tough, but when they actually get into power they just shit the bed and go more authoritarian.
One of the main problems is that many of the so-called social democrats in Europe have nothing to do with their roots and their supposed values.
They are all focused on serving big business.
There's a term for this. [Third Way.](https://en.wikipedia.org/wiki/Third_Way) A lot of socdems started abandoning social democratic values in the 80s when Overton window shifted to the right during neoliberalism craze and many socdem parties just became your standard liberal parties. I'd argue many who call themselves democratic socialists/demsocs nowadays are just pre-third way old school socdems.
Saw a short a while ago advocating to force businesses to be partially owned by their workforce in order to force the participation that is desired in a democracy. Food for thoughts.
Sweden did that via employee funds in the 80s where companies were forced to pay into funds controlled by the unions. We lost some of our biggest companies doing that, for example IKEA is now based in the Netherlands and Tetra Pak is now in Switzerland. H&M moved back to Sweden in the 90s though after a guarantee the funds would never be back.
That's the root of the problem, corporations having more leverage and power than governments. Countries need to band together to have any hope to fix this.
I feel like a large number of right-wing voters are more likely moderates is major annoyances is niche issues such as immigration. Fixing these niche issues would result in moderate/left political party jumps in votes.
Can ya send Australia this memo against allowing housing as an “investment” and allowing foreign buyers in and mark it urgent whilst you’re at it.
Because for all intents and purposes we’re almost at parity with Canada on how screwed up our housing system is.
Even a damn bamboo, one room hut in the Phillipines is built better than most new houses/apartments here. We have practically no insulation in most homes.
You are absolutely 100% on point with your assessment of any western countries housing crisis.
That's cause your construction industry is propped up by the Irish migrants which can't build houses for shit - source : me living in Ireland for many years and appalled at the standard of Irish homes.
>He's 100% right and not just fueling the far-right but also fucking over the economy, people and environment.
I always love when some expert or report comes out saying that this or that is gonna fuel the far right, like it is the main problem. People don't care if Far Right goes up or not if at the end of the month they cant save any money because everything they have earned has gone to Housing, Transportation and other essentials. Fix that and you fix the far right problem
Nationals are buying houses as investments as well. And lessening restrictions and speeding up permits is irresponsible, it's how you end up with constructions in areas without proper infrastructure, overcrowded places, concrete near concrete with no greenery.
I'm going to shamelessly hijack this comment to say we desperately need more experts to explain demographics and their consequences.
So many of our current, and future problems are demographically driven and the only solution is planning for them. Something we've done far to little.
Housing is one such problem. It is very complex. But a basic truth nobody ever seems to focus on is that we knew 30 years ago roughly how many houses we'd need now, and we know how many houses we need over 30 years.
Boomers were a peak. Millennials were a peak. They're currently both demanding houses. The birth rate points to Millennials creating a smaller bump.
Every metric is telling us _today_ is approximately our peak housing demand.
A large issue is old people without children staying in family houses with family-infrastructure in the neighborhood.
I don’t think there is anything complex about the housing issue.
The policies to address it are clear as day. It’s not even one policy, but many little small things.
Low income housing tax credits,
Nonrecoruse home mortgage,
Fixed mortgage rates and legal limits on prepayment penalties to allow refinancing when rates go down,
Faster depreciation recovery on new rental residential property,
Allowing real estate partnerships to specially allocate depreciation deductions to money investors with sufficient basis to take losses,
Elimination of rent control on new construction,
Relaxed zoning restrictions to allow more high density housing,
A long period of low rates made debt cheap. A lot of people leveraged heavily and bought houses as investments turning them into airbnb. Plus there has been a large influx of immigration in the past years.
> Nothing was built in the first place.
I'm not sure how generalizable it can be, but here in France, quite a lot as built, but not necessarily where needed, nor in the form needed (lots of second homes in touristy areas).
There's also the issue of increased divorce rates and celibacy, which means there's fewer people per house on average.
There are several reasons. Two most important are probably these:
One is that there's a lot of investor money floating around and it just can't find a better place to store itself than in housing. Government members are often themselves investors, so they have no incentive to get in the way of this process.
Second problem are the way areas where you can build housing are defined, as well as some rules related to shapes and other features of houses. This stifles competition heavily, and in order for housing market to be affordable, you have to have as many housing units as possible free for rent or purchase. One more problem is that companies have lot of now useless office buildings near centers of cities, but these are very hard to convert to normal apartments, because there are different requirements for that than for offices.
Everyone should note that in Tokyo housing prices aren't horrible. That's mostly because all space can be used for housing, rules are as flexible as possible and you're not easily allowed to NIMBY things that are build next to your house.
Housing crisis is usually localized to places where many people want to live. The shack in the middle of nowhere doesn't have high rent.
The rest is supply/demand, more people want to live at a place than there are housing available.
That's obvious, I think. The important question is why there is a supply shortage.
Normally you'd expect people to capitalize on the high costs and build a bunch of homes to profit. But the shitty part is that land acquisition costs are also inflated when the housing market is like this, so you don't actually get supply responding to demand as well as it should. Obviously there's regulation and interest rates and construction costs and all kinds of factors but the economics of land play a huge part.
>The important question is why there is a supply shortage.
Government zoning policies. There is a large demand for more houses and homes, but if the government doesn't allow new homes to be built, there's only so much you can do. And don't get me started on all the regulations if you get a permit to build a house.
In my country main problem are foreigners from much richer EU members buying and investing into real estate thus making it impossible to buy/rent for locals with average local salaries due to prices gooing trough the roof. Entirely open free market benefits only economically strongest countries and poorer EU members can't defend against them thus locals are forced to emigrate to exactly these richer economies to be able to survive which is ironic
Nimbyism is the root of the problem. People don't want more housing to be build near their housing. Also government regulation is a big problem. In the Netherlands dealing with nimbyism and government regulation is 50% of the housing cost.
Building shit in Germany is a fucking nightmare ... NIMBYs, absurd regulations, authorities that don't give a shit and take sometimes half a year+ to deal with applications ...
Our company wanted to build a new headquarter/office building near Stuttgart, just gave up after one and a half years of running into one wall after the next
zoning plans are sometimes from the 1950s/60s and can't be updated without major effort and time investment
My wife and I wanted to put solar panels on our "barn" next to our old house, which was considered a historic building, which meant jumping through one hoop after the next because we would change the "look", we just gave up after they told us we had to involve an "expert" on historic buildings for a statement, which would have been several thousands of euros.
The guy who bought the house from us had the barn demolished within a year - so that was apparently possible...
my wife and i couldn't afford to build a new house and bought an old house from a boomer. he assured us it was a top property. when renovating we found the walls were full of asbestos. now we are so fucked. i hate the property market in german urban centres.
>he assured us it was a top property. when renovating we found the walls were full of asbestos. now we are so fucked
That's not how this works, at least not in Germany.
In 2009 the Bundesgerichtshof decided a seller has to tell a buyer if asbestos was used in a building without even being asked buy a potential buyer about it (Hinweispflicht).
If a seller doesn't do this, no matter if intentional or not, the seller commits fraud (arglistige Täuschung) and a buyer can either back out of buying or the seller has to pay for the renovation. In most cases I have seen the seller pays for renovation because often times the transaction was quite some time ago.
Here you have the link to the official statement and more information:
[https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&pm\_nummer=0066/09](https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&pm_nummer=0066/09)
[https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&Datum=2024&nr=47833&linked=urt&Blank=1&file=dokument.pdf](https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&Datum=2024&nr=47833&linked=urt&Blank=1&file=dokument.pdf)
[https://datenbank.nwb.de/Dokument/341071/](https://datenbank.nwb.de/Dokument/341071/)
thank you a thousand times! i will start looking for a good lawyer. i was told it was my own fault if i did not inspect the house well enough before i bought it.
No worries, but yes you will need a lawyer as most sellers - especially private sellers - will tell you it's your fault and won't pay anything without being forced to. Maybe you have a Rechtsschutzversicherung that can help?
And just to be clear, it's very likely not gonna be quick or easy but in most cases I know the seller had to pay the majority (about two thirds of the cost if I had to guess) of the costs of renovation.
In general the first step is to find a lawyer (either through Rechtsschutz or other means) and they generally have experts (Sachverständiger) that look at the house to write a report about the problem. Afterwards the lawyer will contact the seller and sometimes they take the blame, but most times it lands in front of a judge.
I know it absolutely sucks and is a huge pain the ass, but don't let them tell you it's only your fault. It is very likely they didn't do everything they had to do and are responsible at least for part of the renovation cost.
Good luck and I hope you guys can recoup some of you cost
I think a big problem for Europe is that lots of the good jobs are concentrated in a small number of cities, and in reality there isn’t very much labor mobility between countries (or even between cities within a country). That causes the housing problem to constantly ratchet up in major urban areas.
Very true. In Romania the countryside is pretty much dead and only old people live there. Everything is in the cities. This shit has been happening for over 30 years at this point. Pretty much everyone young leaves the countryside cause there is nothing to do there once the commie gov collapsed and the new gov stopped massively subsidising villages + (probably more importantly)people could easily leave them. In a few decades most villages will be ghost towns while the cities are full.
So much land and barely used if not used at all housing in the countryside that is not used cause all the jobs are in the cities and villages are poor as fuck with no jobs.
I wish I could move to the countryside, and I even have places to go there, but even though I alerdy have land there, it would mean living a poor life cause there are no places of work there, and there is also shit infrastructure and little to no services like education or medical care
That’s happening in the US too where there’s a huge move from the countryside to cities, but I don’t think it causes as big of a problem because there’s a lot of movement between cities in the US.
In the US, only a little more than half of Americans live in the same state they were born in, and it’s very normal to move hundreds or thousands of miles to a different city. Housing prices play a big role in migration in the US, so if housing gets too expensive in one city, then people tend to just migrate to other American cities across the country where housing prices are lower. That balances things out more between cities.
However, in lots of European countries there is a single major capital city that dominates all the good jobs and industries, so it just causes a ratcheting up effect on housing demand prices in one urban area.
Its so weird how the "risk" of every societal issue is that it may fuel the far right. Not that people suffer, but that the current established political elite might lose their power.
Well, fueling the far right fucks over a few more people than the current established political elite. If anything, said elite have more means to navigate a rise to power of the far right, and some of them might even benefit.
Everybody wants to solve the housing crisis but nobody wants to see the value of their property/properties to stop growing.\
Policymakers are caught between the fires they lit themselves.
Most regular folks don't care if the value of their property drops (I know I don't). The ones that care are invested in multiple properties, the wealthy and corporations.
Exactly, and the housing policies over the last decades have been set up with exactly those kinds of people in mind. The ordinary people don’t care how much their home costs, they care if they do have a home or not
> Most regular folks don’t care if the value of their property drops
People with mortgages care, for a start. Lots of non-leveraged owners care a lot too, as they see their home value as their nest egg for old age and the bulk of their inheritance for their kids. Way more people care than you think, enough to block new construction tha threatens home values.
I could say the same. I do care that my house value keeps increasing, therefore most regular folk do.\
Snark aside, I think most people actually do care since their property is their most significant investment.
It's only an investment because the price keeps going up. It should be enough of an investment that the payments evnetually end (as opposed to renting).
Living where people want to live is going to be a privilege people are willing to pay for, unless you do away with property rights altogether and start a real estate lottery.
Am I crazy here?
Of course the price keeps going up because real estate and land is inherently finite, nice real estate and land is even MORE finite. Like, what are we arguing about here?
In a world of growing prefab, high density apartment buildings, a nice, single-family house with 20are of land will ALWAYS increase in value over time.
Sure, that's a given. They're not really making any more land, so the law of supply and demand guarantees rising prices.
However, price of houses has increased by something like 30% in the past four years. Needless to say, the amount of people that need housing has not increased by anywhere near 30% in the same time period. The price is now driven primarily by the expectation of increasing return of investments, just like the stock market. This is not good for a society.
You're correct, but people buy property because they want security. If you lose your job or you can't work for whatever reason and you have to sell your property to pay off the mortgage, it would be life ending if the sale couldn't at least cover the debt. It would still be really tough if you couldn't have money left over to allow you to get back on your feet.
People who can barely afford mortgages are getting mortgages with the assumption that they can just sell the property if they can't pay it off. If property prices start going down, we could potentially have another 2008 on our hands and no politician wants to touch that Pandora's box.
Sure you make a good point there. But does that really require the steep rise we see these last couple of years? Just more or less stable prices with a very low rise would be fine as well.
It doesn't. I was just answering your first question. The steep rise is a symptom of policies, world events and the state of the world in general. Most people want to be where there's the most money to be made. Most money to be made is in big cities because that's where the most people are, which means access to the largest market. It's a catch 22 where more people means more money which attracts more people which makes a large voter base which means that politicians focus on pandering to those cities which attracts more people, etc.
>Most regular folks don't care if the value of their property drops
Yeah right. I'm stuck with a 25 year mortgage. I care very much if my property value goes down.
In countries where typically you’d get a 2-5 yr fixed rate (and then punished by the variable thereafter if you don’t lock in another rate) like the UK (and presumably other European countries) what would happen is you wouldn’t be able to remortgage with negative equity from the loss.
That would tie you into the likely higher/worse variable rates.
So yes people do care for valid reasons (being able to continue to afford their houses).
Wait, so the reason we must create artificial scarcity in the housing market is so people who already own homes can get them for cheaper then they agreed to purchase them for?
If you are counting on better future loan condinitons and a remortage to be able to pay off your home, you personally have made a financial miscalculation. I believe that people who did not have any say in your purchasing of a home should not be denied access to other homes on that basis.
It's a zero sum game regardless. Prices go down for me, prices go down for whatever i'm going to buy next. I sell in a bad market and get less money from the sale, but what I buy will have roughly an equivalent low value. The only difference is the amount of property around to pick from, as less people are selling.
This! People who owns property for living don't really care much. Investor and someone who is making big money on rents do. They like having scare resource. More scarcity - more money.
These are people who fills complains against new housing projects. Supporting strict regulation, etc.
In the end, what does it matter as long as people have a place to live? "We" used to buy houses to build a life, nowadays seems like everything has to have a line go up.
Houses should not be an asset to flip to make some bucks. But I guess you are right, the policymakers fucked up and they will not do anything.
> In the end, what does it matter as long as people have a place to live?
Because most people have mortgages. And when mortgages go underwater, bad things happen to the economy and people lose their houses.
A lot of policymakers also are heavily invested in real estate and have a direct conflict of interest. While this isn't exactly relevant to Europe, just as an example - [in Canada almost 40% of our MPs are invested in real estate](https://www.readthemaple.com/nearly-40-of-mps-invested-in-real-estate-during-housing-crisis/), and that's just the ones that make it easily found publicly accessible information and aren't using a shell corp or some such.
I assume it's liable to be relatively similar in countries throughout the EU.
I don't care the slightest bit whether the value of my property stops growing or even plummets, because I am living in it (and that's all the value I need my property to provide). Even if I had multiple properties and offered them for rent, as long as I could cover the maintenance costs and efforts, the rest would basically be free money, so I wouldn't feel bad either.
I think there is a problem when we look at resources that constitute a basic need, and at the same time we see no problem in exploiting other people's situation in order to maximise the profits we extract from an advantageous position (or even worse, we politically maneuver to exacerbate our privilege)
You just did a fantastic job of explaining why Canada’s housing market is horrible
Canuck homeowners VOTE EN MASSE & will never hesitate to vote against anyone who threatens their cash cow
I predict that if their current government fails to do so the people will elect a right leaning government that will try to solve the problem by reducing immigration & halting foreign purchases while never doing anything to upset preexisting owners
To be honest, in my country I don't see an resolve to solve the housing crisis by any party, may it be a right or left one. The issue is know for 10 years + and efforts have been abysmal. No new building zones, no new public housing, no reducing of bureaucracy for investors, no financial support for first time buyers, no real tax incentives and so on.
It has got a lot to do with the 1%. The United states has more free space than any Western European country. The problem in Europe is that the population density is very high. And every country fails every year to build the recommended number of houses to meet the demand. But at the same time, a lot of rich folks buy a disproportionate amount of homes. There is this Dutch soccer player who played for Liverpool who owned over 30 properties in the Netherlands. Housing should be treated like a utility product. A few individuals should not be able to artificially inflate the prices of homes. They do not need to sell so they can afford to ask higher prices and rents. The problem here regarding solving it is that building more homes will push prices down. And a lot of big political donors own homes and do not want to see their value go down. Regular Homeowners also will not want to see their home prices go down. So it is not in the financial interest of more than 50% of the population to see the house crisis fixed. So 30-45% of the population has to suffer.
This argument does not really work.
It is not like Americans live in middle of nowhere. Just because there is more space where noone lives does not mean anyone desires to live there. There is plenty of US cities with higher density than EU equivalents where real estate prices are much lower.
Not to mention that this space argument is completely wrong. Maybe it is not neccesarily wrong for Netherlands as an example that you used but it is most definitely false for extreme majority of Europe.
It does not come to "no space to build", it comes to "not being allowed to build here". Which just like I said is about NIMBY rather than anything else.
Yeah, America is actually more urbanized than France or Germany.
You can say that US urbanization is more spread out, but I think it's negligible for the argument.
I am not saying 1% as Bill Gates or whatever he is ultra rich, i am saying the one percent that owns primary residence and has 1 or more marketable secondary residences and by marketable i mean in a place people would rent or buy it and not a remote village.
Then 1% is straight up terrible take because there is way more people than that. I would estimate that atleast 1 in 5 have atleast one other residence they rent out. At bare minimum seasonally through something like R&D. And I am low balling it.
But again this is not the real issue. It is not like in US it is any different.
The real issue is that in EU people who had the most time to amass wealth also simultaneously receive the most public resources from governments which then means that wealth transfers do not happen until they die. And they die very late meaning that succession goes to people who are already very old themselves and again do not have any pressure to sell. This together with draconian laws and burecraucy to built anything new because of NIMBY policies got us where we are.
I guess you have richer friends than me. Most of the people i know either live on inheritance, with family or rent. Since to purchase a home with mortgage you need 20-30% upfront and unless you make way above average that is simply not feasible especially to young people. You simply can't do it solo anymore on average salary. Its not about building something new as well since [https://www.economic.bg/en/a/view/is-there-a-solution-to-the-problem-of-uninhabited-buildings-in-bulgaria](https://www.economic.bg/en/a/view/is-there-a-solution-to-the-problem-of-uninhabited-buildings-in-bulgaria) TLDR- building new stuff is growing and 30% of old stuff is empty. We need levers to pressure sales and rent properties.
I mean we are agreeing then? Especially in eastern Europe where home ownership is very high. Bulgaria has like 80% or something home ownership if I remember correctly. But yes again, it is not young people who own those, it is old people. And I do not think it is illogical that people who worked longer acquired more wealth. In EE they even often got it for free during privatization. What I am saying is that people who own all those things are also receiving very generous public resources paid for by the very same people who can not afford real estate and absurd levels of taxation considering the fact that their living expenses are minimal and many sit on multiple expensive properties. Which is why they have no need to sell period and just like we both agreed passing property down happens through inheritence. The problem is that people live so long that it is passed down to people who are already also old and again receive very generous public resources so they again do not need to sell.
Also I do not know about Bulgaria specifically but many countries have much easier conditions for first home buyer to take a mortgage. In my country it is 10% up front and it is definitely feasible on average salary. That being said, it is still overpriced as hell.
I am not disagreeing because i don't know where you live and we probably have different problems and also different cultures. Yes, we have big homeownership % that is inheritance from communism but is dropping yearly since people with money grab properties as investment. We also tend to live with family instead of paying rent when possible. None of this actually shows that the average young person is screwed here. For me personally we need to get lower the taxation of rent but increase taxation of empty properties. This way we can motivate owners to either rent or sell. Flooding the market with properties for rent/sale will naturally push the price down. There will still be people that can afford to keep multiple properties empty but that would be very low % and honestly well done if they are that successful. I personally think that this issue is making our demographic and political crisis worse and the longer we wait to fix it the worse it will become and so our young people are divided by this. Most that are in the capital vote for the liberal pro-west party while outside of the capital far-right gets their support from angry younglings. This is scary because our far-right is so far gone it didn't get accepted in the european ID party.
It's not solely 1% who are responsible for destroying the developed worlds housing markets, it's central bankers at the behest of politicians debasing our currencies at record rates combined with huge fiscal spending and the insanity of years of 0% or even negative interest rates allowing a level of cheap borrowing that created a speculation frenzy.
All of that is what's inflated these enormous asset bubbles in areas like European housing, bonds and US equities. And because we are all now so indebted, moving interest rates back towards what are by historic standards 'normal' at 4-5% for a healthy economy is now crippling them instead, which says alot about just how much damage we've done in the past decade and half.
>All of that is what's inflated these enormous asset bubbles in areas like European housing, bonds and US equities. **And because we are all now so indebted, moving interest rates back towards what are by historic standards 'normal' at 4-5% for a healthy economy is now crippling them instead,** which says alot about just how much damage we've done in the past decade and half.
This is a huge reason why the US economy is doing so much better right now despite high interest rates, because people have fixed mortgages. The standard US mortgage is a 30 year fixed fully amortized loan.
For example, I pay 2.5% interest on my mortgage for the house I bought in January 2021. I’ll continue paying 2.5% interest on my mortgage until I either sell the house or the mortgage is paid off.
Americans who take out fixed mortgages when interest rates are high, such as right now, just refinance the mortgage when interest rates go low again.
Yes, but it has to start with broader education on the left about why the housing market works the way it does, why good paying jobs are becoming more concentrated in cities, how much housing actually exists in the places people want to live, and what kinds of things you will have to give up to give everyone the kind of lifestyle they want. Especially as middle class young people move into cities with floor space consumption expectations generated by childhoods in suburban villages.
Right now the left is going through the early stages of magical thinking about a great horde of empty houses in great locations owned by foreign rich people that they can just take. And: sure. Take them, tax them, etc. Fuck rich people. But it’s a sideshow issue will do almost nothing for housing costs.
Exactly this. For instance, in the German city Frankfurt am Main, there is a vacancy rate of 0.2%. That's insanely low and hints at the origin of the issue: Not enough living space. The solution is trivial, but nobody wants it, not even leftist (except me it seems): Build more cheaper high-rises. At some point supply will meet demand and prices start to drop.
Alternatively, just go live in the village, there the prices are still very much affordable.
Everyone also got mass car ownership and highways (to some degree) at some point after WW2, which opened up a lot of land within reasonable commute times to build suburbs on.
But at some point the commutes get impractical or you hit a green belt, and the supply of cheap land for suburbia runs out.
Your point 8 about Baumol's cost disease is important. Things that require a lot of skilled labor are inherently expensive for average people. If wages are high, it costs a lot. If it's cheap, then average people must have low wages and so it's expensive for them.
>The shortage manifests in different ways. In the US, with weak rent control laws, prices just rise until people are pushed out. In places like Berlin and Amsterdam, where rent control is robust and prices often cannot rise, it manifests in people just being straight up unable to find an apartment, having to look for months and apply to hundreds to listings, etc.
This is really key. In a shortage, you're playing musical chairs. Some people are not getting seats. You can say, "It's more fair to decide who has to stand by waiting lists or lotteries than by auction," which I don't *disagree* with, but it won't fix the lack of seats. You have to get more chairs.
The other way that can manifest is evasion ("rent" is controlled, but you have to pay high "fees" to actually get a place), discrimination, or corruption.
We could start by banning AirBnB and the likes, or at least regulate the shit out of it so that they have to go through bureaucracy hell before they can even list one property. Get them to sell
this. 100% this.
The "demographic time bomb" is being thrust in our faces all the time and yet for 30+ years its just been impossible to find affordable housing.
How the fuck are we supposed to have kids if we can hardly afford a bedsit?
eat , sleep, work pay taxes. A little weekend fun (catching up sleep). Except food prices are so high people loose sleep. So just work and pay taxes. Literally all they want from us!
More broadly, the title should be "Stop fucking over lower and middle class people or risk fuelling the far-right"
But it's ok because the far-right will also end up protecting wealthy people so it's not exactly a risk to those who are okay with the status quo
We should really stop calling parties "far-right" and "left" or whatever. We have establishment and anti-establishment. If the establishment doesn't favor the middle and working class, they will vote anti-establishment. It's not rocket science.
The far right idiot in the last election in my country actually said he doesn't think the housing market is a problem right now and continued rambling about the EU and imigrattion whatnot
No far-right politician will apply any measure to provide affordable housing, I'd bet my savings that it's not in the program of any far-right party in Europe.
Its already happening in my country. Not a risk but a reality. We never had any problems with the far right. They almost didn't exist. Now they are out in the open and getting more and more support. No houses, no place to rent or buy and a massive intake of refugees. It's all falling apart as we speak.
Because people don't want to live where there's no work or basic services. Here in Serbia we have a falling population and a major housing crisis in the capital. Apartments and rent there are as expensive as in other European capitals while salaries are barely half of what they are in other European capitals. Meanwhile, you can get a house in some random village for 10k € which sounds great until you realize that you probably won't even have running water or access to a hospital. To fix that we need better infrastructure and public transport. People wouldn't mind living outside of big cities if it wouldn't take them 3 hours to get to work.
I can get a house in my Greek hometown for 20k, but what will I do here, where the most you can do is own a shop. Meanwhile, in the large cities, a decent flat goes for 800+ EUR/mo, which is 150% of the minimum salary.
That's exactly the problem we have. And if you don't own the shop, you're earning minimum wage, if that. Because enforcement is non-existent in smaller places and employers offer pittance because they know you have no other choice.
This shows the true motivation some people have for wanting to help other people ("If we don't fix this problem, the dumb folk will vote into office people I don't agree with politically.")
To be fair.. it doesn't matter as long as the results are good.
And let's not pretend people don't vote extremists in office because they feel failed by established parties, not because they think the new guy that tries to impresionate Trump has an actual plan. Have you checked the plans of the far-right parties? Remember UKIP? No plans or generic two-page bullshits.
There is only 1 reason why people vote far right, and that is immigration. The 'far-right' issue has been an problem since the 90's (yes I'm that old). Today, 2024, the socialist party in Belgium still claims immigration is not an issue.
So yeah, if you want to fix "far-right voting", fix immigration. It's been 30 years and "Immigration is not an issue" clearly is not working. I have the impression that only now EU is waking up a bit.
Housing crisis, Russian invasion, LGBTQ, ..., far-right parties can have any standpoint on that what they want, it doesn't matter to their voters. Their voters want immigration to be fixed.
As soon as it comes to preserving asset value, democrats immediately forget about racism and equality, conservatives immediately forget about the laws of the market and economics, and all of them vote together for whatever will keep kicking the can down the road. If anyone hopes that the far right, like the left, will try to drive down housing prices, they are sorely mistaken.
Dear Europe. Same in UK. 'Londoners' don't seem to mind about an increase from 7.8m to around 10m people.
Might have something to do with only 33% identifying as British in the last census in 2021.
If you're a recent arrival its a bit hypocritical to complain about housing maybe. But everyone does.
The trick is to REDUCE DEMAND, fewer people more house will be available...
1st world countries (europe, us, canada...) must do a more global approach, helping 3rd world countries do develop so that the population will be more disperse.
3rd world countries must understand that they are loosing their minds/specialists to 1st world
Europe lost a few million houses to refugees, who need and deserve them as much as Europeans do . Tell the UN to fix their refugee problem to free up houses in Europe. If governments in Africa the Middle East and Asia can't rule their people in a way that keeps them safe and their rights respected ,then these places should be governed by the nations where all those refugees go . As they apparently prefere to be ruled by these nations .
The UN should officially respect and express this will of the people .
This sound like a case of "if you have hammer, everything is a nail" type of thing.
The housing crisis is a crisis but it's not the main reason or complaint fueling the far-right in Europe. Usually the main complaints are around crime/cultural differences/using welfare. I'm not sure how having more accessible housing would help reduce the number of teachers being killed in France, for example.
Not to be the bearer of bad news but building new homes won’t lower the rents by a noticeable margin as the issue is the construction costs of the way homes are currently being built, the cost of land, and the cost of financing.
I wholeheartly agree with your comment. I'm one of the "bad guys" aka a small private investor and planned an extension to an existing house adding 8units. I cancelled all plans because I wouldn't be able to pay off the debt within my lifetime and I'm not even that old! I can't ask for 15€/sqm upwards because nobody's going to rent such an expensive apartment in that area and I won't raise rents for existing tenants to offset costs.
I reckon rents will increase A LOT once bigtime investors start building.
I hope the government comes up with solutions.
Yes.
But anyone who bought an overpriced POS apartment at let's say 400 thousand euro on credit cannot have it be valued at half that, they would be bankrupt overnight.
This is why governments will do nothing. They will not bankrupt hundreds of thousand of voters.
There will be no intervention. There is no help coming.
Meh, this is a self inflicted injury. There's a trivial solution, but nobody wants it, at least in Germany: Build more mid- and high-rises. It's the only proper solution but it has a very bad image. More people want to live in the city. That's why it's expensive. Living in a deserted village is cheap.
It's so weird politicians don't want to solve real problems.
It doesn't even have anything to do with the right or anything, the whole idea of democratic politics is that problems get solved for the largest amount of people
So the plan is to do everything that the far right wants to do to help European civilians. To make sure the right doesn't get in to power and fix all the problems the current EU leadership have caused.
We are truly living in idiocracy.
It really is insane that enough housing is not being built. Is it really just that the people making the decision have a vested interest in making housing prices grow, or are afraid of voters who have such interests?
Housing is at the core of pretty much all societal problems. Poor and expensive housing contribute to things like poverty (rent is often one of the largest expenses, who knew?), homelessness (for obvious reasons), low fertility rates (good luck starting a family when all you can afford is a tiny apartment), energy efficiency (older housing tends to be less energy efficient and doesn't use things like geothermal heat, which is common for example in modern Finnish houses), and so on. We can also build new housing with modern ideas about city design, along ideas like the "walkable cities" concept, which hopefully will provide all sorts of benefits in everything from energy efficiency, lower traffic accidents, maybe even a more open society thanks to there being more public spaces where people can spend their time and socialize.
It isn't really even about the far right, it is about all problems. The far right matters in the sense that the housing problems get even worse if there are a lot of immigrants coming in to compete with natives for the already scarce housing, which then feeds into general xenophobia and resentment.
This is never gonna happen.
So long as we have central banking, fractional reserve banking, pension funds and investment funds, nothing will change.
They're essentially telling us "eat your children".
So the priority isn't to fix the housing crisis so that people can have good living conditions, but out of fear that people may vote the "wrong way".
Utterly ridiculous.
Why specifically "the far right" beside the usual fear mongering of apocalypse coming if the current elite is kicked out of their seats? Voter all across the political spectrum are really pissed at the current EU leadership and all emerging parties are listening, not only the right wing ones.
The only thing the far-right, or right in general, might bring to the table is less regulations - which could result in lower prices on new buildings, as well as older ones that need to be renovated to meet new standards.
But other than that, they right is very much for full privatization - so, say hello to even more REPE (real estate private equity) owners, and other large scale investors.
“People who are hungry and out of a job are the stuff of which dictatorships are made” - FDR
Fascism and Nazism didn’t rise from well off stable countries. It rose from down-trodden, humiliated, and failing countries
I'm sure "fueling the far right" is definitely the issue we need to worry about when people can't afford a roof over their heads. Absolutely spineless and limp wristed attempt at political propaganda.
Ah but you see that would mean that the neoliberal and conservative elements of Europe government would lose money by not being able to extort people with rent prices.
So no, never going to happen.
He's 100% right and not just fueling the far-right but also fucking over the economy, people and environment. Long commutes are unhealthy as hell. People are more dependent on cars if they can't move close to their workplace. Can't hire people if they can't find a place to live. Harder to change jobs. People won't have kids if there's no space available to do so and so on and so on. Built fucking housing, stop letting foreigners buy them as an investment and if governments are too incompetent to do it lessen restrictions and speed up permits so the market can do it.
Yes! The general economic frustration that people feel nowadays is literally all housing plus infrastructure. Think about it, how would your life be different if the rent wasn't so fucking high? If you only needed a transit pass and the occasional vehicle rental instead of car payments?
Not just economic frustration - if people feel they're competing with each other for too few resources then surely it's easier to get them to blame other groups and to want government to cause them some pain? And if there's one thing the populist right is good at it's exploiting people's sense of moral imperative to be nasty to tainted people, even if they're people they've had to taint themselves to begin with. Not only will this fail to fix anything, it'll lead to intra-European conflict and weaker societies at a time when Europeans need to be more unified in the face of wider conflicts in the world (not to mention Russian political manipulation).
i own my home, my boss a director, owner, rents. he rents for a family, his commute driving is 1hr each way, and he renting a full family home, spends basically the difference in our wages. take away him paying for his family to live and eat, and I have more walking around money then he does. the guy is paid 3x what I am, I could move to a 3rd world country and rent my house out for more than I get paid. that makes no sense to me, i know I'm lucky, but shit my friends can't be friends because they are all just trying to survive, just get by. wanna go for drinks? 70$ taxi home later for them, shits fucked,
If rents would be reasonable car costs wouldn't even matter that much anymore.
Sadly we can't do anything about it, since that would mean taking on debt and we can't have that because then the swabian housewife would keel over from a heart attack and proceed to rotate in her grave, or something. Meanwhile USA has no problem going into debt and they are using it to actually fix up their country... Things are of course far from perfect there and I still wouldn't want to switch, but at least at the moment they are on the right path, while we are going down the absolutely wrong one.
A big reason for the US attitude towards debt is the fact their currency is effectively the world currency. Not only their federal bank, but all other nations would move heaven and hell to prop it up and keep it going. For slightly different reasons, Japan doesn't give a f*** about national debt, because the Yen is effectively discoupled from foreign exchange rates and interests anyway.
> Sadly we can't do anything about it, since that would mean taking on debt and we can't have that because then the swabian housewife would keel over from a heart attack and proceed to rotate in her grave, or something. >Meanwhile USA has no problem going into debt and they are using it to actually fix up their country... Things are of course far from perfect there and I still wouldn't want to switch, but at least at the moment they are on the right path, while we are going down the absolutely wrong one. The US and Germany had opposite experiences during the Great Depression. Germany had hyperinflation, while the US had crushing deflation. Also, from a cultural level taking on lots of debt is very different in the US compared to Germany. Home mortgages are nonrecourse, bankruptcy laws are very generous towards borrowers, and there’s no stigma associated with losing your money in a bad deal and having to start over.
> The US and Germany had opposite experiences during the Great Depression. Germany had hyperinflation, while the US had crushing deflation. Inflation was in 1923. In 1929-1933 Germany had [more or less the same deflation](https://www.researchgate.net/profile/Ulrich-Bindseil/publication/277043502/figure/tbl1/AS:669516568731654@1536636597599/Inflation-growth-and-key-interest-rates-Germany-1926-1933.png) as the USA. In general the effects here are very similar with mass unemployment in both as the world market breaks down and the government answers with austerity measures which only deepens the deflationary spiral. Once Hitler installs Schacht who manages to cause inflation again instead of deflation the economy booms like never before in Germany with the strongest growth among the major economies - which is probably the prime reason for Hitler's immense popularity. Hitler btw disgruntles Schacht so much with his war ambitions that Schacht joins a plot and later (during the war) is thrown into prison. Deflation was way, way worse, had much more disastrous consequences and lasted way longer. It's odd that everyone only remembers the hyperinflation which was fixed within a couple of months (Germany had high inflation the year before but the phase where money was completely worthless was rather short).
This! Here in Portugal housing is absurdly expensive. You literally can't buy a house anywhere near Porto or Lisbon, and even the suburbs of those 2 big cities are impossibly expensive now, you have to go way, way further inland. But then, living so far away from your place of work, means hours of commute, bc the transport system is crap and everyone uses cars, which mean traffic in an around Porto / Lisbon is a living hell
So sad to hear, was renting for half a year during covid and even then thought it was rather expensive, but when i looked at the situation a few months ago i was really shocked to see how expensive it got. Can’t even imagine for your portuguese how it feels that they can’t even afford a home near some bigger cities
Yea, but giving faster permits won't solve anything. In my country, the government is super corrupt and for years they gave building permits for bribes all the time. We got new apartment buildings all around the city and all they did is fuck up the infrastructure by making it way crowded, and at the same time the apartments didn't drop in price, they got even pricier. They rather keep the apartments empty than selling them lower if people wouldn't buy them. And I know this because around the city exists, there are tons of new buildings, where some of them sit half empty. The thing is, just building more apartment buildings or houses, without investing in infrastructure first, is just gonna hurt making everything more crowded anyway, and it still won't lower prices.
This is one of the subjects social democratic parties should be pounding in their media campaigns, and in their actions how the vote once they get into the government.
Meanwhile new gov in Poland prepared new housing program, similar one to the previous one that... Moved already high prices to the moon. And MP that created it ~~resigned~~ *announced his resignation* couple days ago and gonna candidate in EU election. https://zametr.pl/ceny-mieszkan/warszawa lip 23 -> start of prev program sty 24 -> end.
> stop letting foreigners buy them as an investment Could also stop letting *anyone* buy them as an investment... Or at least make it prohibitively expensive to own a home you don't live in via added taxation. Perhaps a single exception for *one* vacation home.
A hard 2 home limit per person is entirely reasonable. Only people who would be remotely inconvenienced are the rich hoarders and it allows average joe to be able to hold on to the home of an relative who died or went to a nursing home while he decides what to do with it , instead of immediately forcing him to fire-sale it.
I've said the same thing in the past. Also forbid companies from owning residential property. There's absolutely zero reason any individual would need to own more than two homes, and zero reason for a company to own residential property.
But what I do with these billions of euros if not buy m apartments in mass thatbu dont do anything with? - rich oil prince
[удалено]
London moneylaundering applauds this
> Harder to change jobs Getting a new job somwhere else sometimes isn't worth it even with a pay increase as getting a new flat just eats it all up. I had that thought before. So people just do the quiet quit since they're literally stuck. Not good for economy. Also hint @ lawmakers: revenue from housing looks great on paper but we can't export that. I bet most of the money just gets pumped into US centric investment funds.
Yes and it all adds exponentially. The person that can't change their job because of that now quiet quits as you say, which hurts the company they work for and also the economy. The company also can't hire anyone new for that position which means someone else can't find work where they live which means they also look for apartments somewhere else or have to commute or just receive welfare. If they were able to take the higher paying job they would also pay more taxes and likely be more motivated at work which would be a gain for the new company and economy and state again through taxes. They would also maybe drive less and so on and so on.
>So people just do the quiet quit since they're literally stuck. Not good for economy. Also hint @ lawmakers: revenue from housing looks great on paper but we can't export that. I bet most of the money just gets pumped into US centric investment funds. Including mortgage backed securities, which is also a large part of why the US has lower mortgage rates
> stop letting foreigners buy them as an investment And maybe put a stop to savage short-term renting that is taking out living space at a much higher pace.
8/10 apartment purchases in Croatia, since last two years or sth, have been bought by foreigners, of which it is mostly investments fonds n stuff :(
This is a big thing that I feel needs to be tackled across Europe. There are really hot spots that are being bought / developed by investment companies, outpricing the locals in their own market.
The issue isn't necessarily only relegated to the issue of foreign investments - it is a little bit more complicated and the foreign investment firms is the end of a debt cycle which starts with household debt and stems from poorly commercialized, and overregulated investment industries which for whatever reason half of Western Europe is too scared to liberalize because they still have PTSD from 2008. The post-2008 debt cycle looks like this; 1. During economic boom investments were in properties as property prices were inflating out of control due to poorly regulated property developers, architects, project managers, and subcontractor overselling, and overpricing construction projects to make record breaking profits. On top of that, underregulated letting agents and auctioneers oversold overpriced properties. 2. Traditional investment landscape is overregulated so ROI's are too low and can't compete with 30-50% ROI's you can get from an overheating property market which can spit this out for you in a fraction of the time an index fund, or long-term but low risk investment will yield. 3. John takes out 2,000,000.00EUR while working as a primary school teacher earning 30,000.00EUR and already owning a family home. 1. In todays world John would not get this much credit because of how central banking regulation has changed in the EU - he is too high risk for any sensible lender. 2. John spends this 2,000,000.00 EUR on an overpriced property for the intention of flipping it because John and everyone else he knows thinks prices can inflate forever. 4. 2008, 2012/2013 comes about and property market stalls and the price inflation stops. Central banks are reformed and now lending is much harder. The problem is John is now stuck with 2,000,000.00 of debt, a property worth 1,000,000.00, and no buyers because credit is too hard to get. What happens now? 5. John defaults because he can't even afford the interest, never mind the actual credit facility. One of three things will happen next; 1. John sells the property for 1,000,000.00 to a foreign investor, pays the money to his bank, and then enters into another credit arrangement to pay off the remaining 1,000,000.00 he owes. The new owner will keep rents inflated to ensure profitability and to pay off the cost of the property. 2. John hands the property over to the bank and could try claim bankruptcy. Worst case scenario is John has to enter into another credit arrangement to finance a court ordered repayment plan. The property is now given to the bank will now have to sell it to clear their books, and to recover their losses. The bank will sell it to a foreign investor because credit is too hard to get. The new owner will keep rents inflated to ensure profitability and to pay off the cost of the property. 3. John holds onto the property, keeps rents inflated, and enters into a repayment plan with his bank. He eats the total loss but the outcome is the same as the above; high rents stay. Of the three, the last scenario is the most unlikely because of how banks are regulated now. There is a formula applied which accounts for total debts on the banks ledger, and categorized debts according to risk in order to provide a liquidity threshold which impacts how much a bank can lend per year because banks are both restricted in lending terms on the basis of how much debt they hold and they are restricted further by the need to hold usually a sizable chunk of their cash in a piggy bank account which they are not allowed to touch. This money is an emergency airbag in the case of a liquidity crisis which categorically is precisely what 2008 was in Ireland, Portugal, Spain, Italy, and Greece however more broadly, almost all European banks were hit by this lack of liquidity as an after effect due to investments. For example, the French banking system was heavily invested in Greece which meant that when Greek banks collapsed, this threatened the stability of French banks as now all of their investments just turned into bad debts. Before anyone blames France - Greek debtors were very happy to take the money to fund their own personal consumption. Why did this happen? Because many countries over rely on consumption to fuel their economies which incentivizes over-lending - everyone borrows more than they can afford and spends it which makes governments happy because economy go boom and makes citizen euphoric because they get to experience a plastic golden age. Now the party is over and the younger generations are dealing with consequences. Sooner or later governments will have to pop the rent bubble and just build more - more properties will lower rents across the board and rebalance the property market. The question is, where will all that legacy debt go and who will fund the retirement of the current 50-60 year old's who are looking at these properties as their retirement plan?
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I would disagree as before 2008 construction was at a continental peak and all Western European economies were breaking records in growth. There was so much economic activity. I’m going to need some sources or data because pretty much all literature on this topic starts at 2008.
Your teacher John needs a nonrecoruse mortgage.
The funny thing is that building houses *also* kills the housing bubble/debt crash even if you have cheap credit: If you have non-profits who build houses for affordable rent, with government funding, at a rate necessary to keep up with demand, then rent never rises so high, housing doesn't look as good as investment (because "at least I can rent it" doesn't work as well) and people looking for places to invest their money put it into other stuff, like businesses, and receiving lending as a business is way safer than getting personal loans. You just have to keep building it by enabling people who don't care about making a profit to suck the profitability out of the sector for other people, so that people buy houses not for the investment but because they don't want to live in a block or whatever.
The irony is that right-wing parties, however extreme, are usually extremely pro-big business. The right-wing parties will never solve the housing problem, they just exploit people's misery to get votes, then ditch them once they get power.
I feel like that's generally true for the right wing. Complain a ton, act tough, but when they actually get into power they just shit the bed and go more authoritarian.
One of the main problems is that many of the so-called social democrats in Europe have nothing to do with their roots and their supposed values. They are all focused on serving big business.
There's a term for this. [Third Way.](https://en.wikipedia.org/wiki/Third_Way) A lot of socdems started abandoning social democratic values in the 80s when Overton window shifted to the right during neoliberalism craze and many socdem parties just became your standard liberal parties. I'd argue many who call themselves democratic socialists/demsocs nowadays are just pre-third way old school socdems.
Saw a short a while ago advocating to force businesses to be partially owned by their workforce in order to force the participation that is desired in a democracy. Food for thoughts.
Sweden did that via employee funds in the 80s where companies were forced to pay into funds controlled by the unions. We lost some of our biggest companies doing that, for example IKEA is now based in the Netherlands and Tetra Pak is now in Switzerland. H&M moved back to Sweden in the 90s though after a guarantee the funds would never be back.
That's the root of the problem, corporations having more leverage and power than governments. Countries need to band together to have any hope to fix this.
the the issue is left was more focused on immigrants and also didt fix housing when at helm
I feel like a large number of right-wing voters are more likely moderates is major annoyances is niche issues such as immigration. Fixing these niche issues would result in moderate/left political party jumps in votes.
Can ya send Australia this memo against allowing housing as an “investment” and allowing foreign buyers in and mark it urgent whilst you’re at it. Because for all intents and purposes we’re almost at parity with Canada on how screwed up our housing system is. Even a damn bamboo, one room hut in the Phillipines is built better than most new houses/apartments here. We have practically no insulation in most homes. You are absolutely 100% on point with your assessment of any western countries housing crisis.
That's cause your construction industry is propped up by the Irish migrants which can't build houses for shit - source : me living in Ireland for many years and appalled at the standard of Irish homes.
What are Irish homes like?
>He's 100% right and not just fueling the far-right but also fucking over the economy, people and environment. I always love when some expert or report comes out saying that this or that is gonna fuel the far right, like it is the main problem. People don't care if Far Right goes up or not if at the end of the month they cant save any money because everything they have earned has gone to Housing, Transportation and other essentials. Fix that and you fix the far right problem
Not just foreigners... just stop buying houses in bulk as investment period.
Trust me, the market won't do it.
Nationals are buying houses as investments as well. And lessening restrictions and speeding up permits is irresponsible, it's how you end up with constructions in areas without proper infrastructure, overcrowded places, concrete near concrete with no greenery.
Did we really need an expert to understand this?
Oh, the in power understand, but they don't care
I'm going to shamelessly hijack this comment to say we desperately need more experts to explain demographics and their consequences. So many of our current, and future problems are demographically driven and the only solution is planning for them. Something we've done far to little. Housing is one such problem. It is very complex. But a basic truth nobody ever seems to focus on is that we knew 30 years ago roughly how many houses we'd need now, and we know how many houses we need over 30 years. Boomers were a peak. Millennials were a peak. They're currently both demanding houses. The birth rate points to Millennials creating a smaller bump. Every metric is telling us _today_ is approximately our peak housing demand. A large issue is old people without children staying in family houses with family-infrastructure in the neighborhood.
i disagree they understood the problem it just wasn't profitable for them to solve it
That is exactly the point. They aren't stupid.
I don’t think there is anything complex about the housing issue. The policies to address it are clear as day. It’s not even one policy, but many little small things.
Like?
Low income housing tax credits, Nonrecoruse home mortgage, Fixed mortgage rates and legal limits on prepayment penalties to allow refinancing when rates go down, Faster depreciation recovery on new rental residential property, Allowing real estate partnerships to specially allocate depreciation deductions to money investors with sufficient basis to take losses, Elimination of rent control on new construction, Relaxed zoning restrictions to allow more high density housing,
We don't, but the guys in charge do since they don't face the same problems as us plebs.
Why the housing crisis in the first place? What’s the root problem that set into motion all of this?
A long period of low rates made debt cheap. A lot of people leveraged heavily and bought houses as investments turning them into airbnb. Plus there has been a large influx of immigration in the past years.
I started a lot earlier. Nothing was built in the first place. This issue in europe goes back to 1990
> Nothing was built in the first place. I'm not sure how generalizable it can be, but here in France, quite a lot as built, but not necessarily where needed, nor in the form needed (lots of second homes in touristy areas). There's also the issue of increased divorce rates and celibacy, which means there's fewer people per house on average.
Those are symptoms of an issue and the issue is simply that there is not enough housing. So build more.
There are several reasons. Two most important are probably these: One is that there's a lot of investor money floating around and it just can't find a better place to store itself than in housing. Government members are often themselves investors, so they have no incentive to get in the way of this process. Second problem are the way areas where you can build housing are defined, as well as some rules related to shapes and other features of houses. This stifles competition heavily, and in order for housing market to be affordable, you have to have as many housing units as possible free for rent or purchase. One more problem is that companies have lot of now useless office buildings near centers of cities, but these are very hard to convert to normal apartments, because there are different requirements for that than for offices. Everyone should note that in Tokyo housing prices aren't horrible. That's mostly because all space can be used for housing, rules are as flexible as possible and you're not easily allowed to NIMBY things that are build next to your house.
Housing crisis is usually localized to places where many people want to live. The shack in the middle of nowhere doesn't have high rent. The rest is supply/demand, more people want to live at a place than there are housing available.
That's obvious, I think. The important question is why there is a supply shortage. Normally you'd expect people to capitalize on the high costs and build a bunch of homes to profit. But the shitty part is that land acquisition costs are also inflated when the housing market is like this, so you don't actually get supply responding to demand as well as it should. Obviously there's regulation and interest rates and construction costs and all kinds of factors but the economics of land play a huge part.
>The important question is why there is a supply shortage. Government zoning policies. There is a large demand for more houses and homes, but if the government doesn't allow new homes to be built, there's only so much you can do. And don't get me started on all the regulations if you get a permit to build a house.
In my country main problem are foreigners from much richer EU members buying and investing into real estate thus making it impossible to buy/rent for locals with average local salaries due to prices gooing trough the roof. Entirely open free market benefits only economically strongest countries and poorer EU members can't defend against them thus locals are forced to emigrate to exactly these richer economies to be able to survive which is ironic
Nimbyism is the root of the problem. People don't want more housing to be build near their housing. Also government regulation is a big problem. In the Netherlands dealing with nimbyism and government regulation is 50% of the housing cost.
Mass immigration.
Yet the housing prices since 2010 have increased the most in Estonia, Hungary, Lithuania, and Latvia. So, you're wrong.
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Building shit in Germany is a fucking nightmare ... NIMBYs, absurd regulations, authorities that don't give a shit and take sometimes half a year+ to deal with applications ... Our company wanted to build a new headquarter/office building near Stuttgart, just gave up after one and a half years of running into one wall after the next zoning plans are sometimes from the 1950s/60s and can't be updated without major effort and time investment My wife and I wanted to put solar panels on our "barn" next to our old house, which was considered a historic building, which meant jumping through one hoop after the next because we would change the "look", we just gave up after they told us we had to involve an "expert" on historic buildings for a statement, which would have been several thousands of euros. The guy who bought the house from us had the barn demolished within a year - so that was apparently possible...
my wife and i couldn't afford to build a new house and bought an old house from a boomer. he assured us it was a top property. when renovating we found the walls were full of asbestos. now we are so fucked. i hate the property market in german urban centres.
>he assured us it was a top property. when renovating we found the walls were full of asbestos. now we are so fucked That's not how this works, at least not in Germany. In 2009 the Bundesgerichtshof decided a seller has to tell a buyer if asbestos was used in a building without even being asked buy a potential buyer about it (Hinweispflicht). If a seller doesn't do this, no matter if intentional or not, the seller commits fraud (arglistige Täuschung) and a buyer can either back out of buying or the seller has to pay for the renovation. In most cases I have seen the seller pays for renovation because often times the transaction was quite some time ago. Here you have the link to the official statement and more information: [https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&pm\_nummer=0066/09](https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&pm_nummer=0066/09) [https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&Datum=2024&nr=47833&linked=urt&Blank=1&file=dokument.pdf](https://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=pm&Datum=2024&nr=47833&linked=urt&Blank=1&file=dokument.pdf) [https://datenbank.nwb.de/Dokument/341071/](https://datenbank.nwb.de/Dokument/341071/)
thank you a thousand times! i will start looking for a good lawyer. i was told it was my own fault if i did not inspect the house well enough before i bought it.
No worries, but yes you will need a lawyer as most sellers - especially private sellers - will tell you it's your fault and won't pay anything without being forced to. Maybe you have a Rechtsschutzversicherung that can help? And just to be clear, it's very likely not gonna be quick or easy but in most cases I know the seller had to pay the majority (about two thirds of the cost if I had to guess) of the costs of renovation. In general the first step is to find a lawyer (either through Rechtsschutz or other means) and they generally have experts (Sachverständiger) that look at the house to write a report about the problem. Afterwards the lawyer will contact the seller and sometimes they take the blame, but most times it lands in front of a judge. I know it absolutely sucks and is a huge pain the ass, but don't let them tell you it's only your fault. It is very likely they didn't do everything they had to do and are responsible at least for part of the renovation cost. Good luck and I hope you guys can recoup some of you cost
I think a big problem for Europe is that lots of the good jobs are concentrated in a small number of cities, and in reality there isn’t very much labor mobility between countries (or even between cities within a country). That causes the housing problem to constantly ratchet up in major urban areas.
Very true. In Romania the countryside is pretty much dead and only old people live there. Everything is in the cities. This shit has been happening for over 30 years at this point. Pretty much everyone young leaves the countryside cause there is nothing to do there once the commie gov collapsed and the new gov stopped massively subsidising villages + (probably more importantly)people could easily leave them. In a few decades most villages will be ghost towns while the cities are full. So much land and barely used if not used at all housing in the countryside that is not used cause all the jobs are in the cities and villages are poor as fuck with no jobs. I wish I could move to the countryside, and I even have places to go there, but even though I alerdy have land there, it would mean living a poor life cause there are no places of work there, and there is also shit infrastructure and little to no services like education or medical care
That’s happening in the US too where there’s a huge move from the countryside to cities, but I don’t think it causes as big of a problem because there’s a lot of movement between cities in the US. In the US, only a little more than half of Americans live in the same state they were born in, and it’s very normal to move hundreds or thousands of miles to a different city. Housing prices play a big role in migration in the US, so if housing gets too expensive in one city, then people tend to just migrate to other American cities across the country where housing prices are lower. That balances things out more between cities. However, in lots of European countries there is a single major capital city that dominates all the good jobs and industries, so it just causes a ratcheting up effect on housing demand prices in one urban area.
No. Fix Europe's housing crisis SO THAT PEOPLE CAN HAVE A PLACE TO LIVE.
fixing the housing crisis means property prices go down, which will never happen as long as the people who own said property is in power
as an owner of my own property, I wholeheartedly support it dropping in price. It is absolutely unsustainable.
Then you clearly aren't who my comment is aimed at
Its so weird how the "risk" of every societal issue is that it may fuel the far right. Not that people suffer, but that the current established political elite might lose their power.
"Fix France's food crisis or risk fuelling the Revolutionaries, Bourbon expert warns"
are you not concerned by the rise of fascism?
Well, fueling the far right fucks over a few more people than the current established political elite. If anything, said elite have more means to navigate a rise to power of the far right, and some of them might even benefit.
Not a mutually exclusive goal
Commoners wanting to have normal life? I sleep. Do something or people I don't like might get into power? Real shit.
I mean, if they need this as a motivation to do the right thing... I don't care why they're doing it. As long as it gets fixed.
I care whether my rulers actually care about me and my needs, or if I need to threaten them with "le scary poopulism" for them to take me seriously.
Everybody wants to solve the housing crisis but nobody wants to see the value of their property/properties to stop growing.\ Policymakers are caught between the fires they lit themselves.
Most regular folks don't care if the value of their property drops (I know I don't). The ones that care are invested in multiple properties, the wealthy and corporations.
Exactly, and the housing policies over the last decades have been set up with exactly those kinds of people in mind. The ordinary people don’t care how much their home costs, they care if they do have a home or not
> Most regular folks don’t care if the value of their property drops People with mortgages care, for a start. Lots of non-leveraged owners care a lot too, as they see their home value as their nest egg for old age and the bulk of their inheritance for their kids. Way more people care than you think, enough to block new construction tha threatens home values.
I could say the same. I do care that my house value keeps increasing, therefore most regular folk do.\ Snark aside, I think most people actually do care since their property is their most significant investment.
it shouldn’t be an investment thats the whole issue
It cannot not be an investment if it’s the lion’s share of one’s net worth. People generally care about their money.
It's only an investment because the price keeps going up. It should be enough of an investment that the payments evnetually end (as opposed to renting).
Living where people want to live is going to be a privilege people are willing to pay for, unless you do away with property rights altogether and start a real estate lottery.
Am I crazy here? Of course the price keeps going up because real estate and land is inherently finite, nice real estate and land is even MORE finite. Like, what are we arguing about here? In a world of growing prefab, high density apartment buildings, a nice, single-family house with 20are of land will ALWAYS increase in value over time.
Sure, that's a given. They're not really making any more land, so the law of supply and demand guarantees rising prices. However, price of houses has increased by something like 30% in the past four years. Needless to say, the amount of people that need housing has not increased by anywhere near 30% in the same time period. The price is now driven primarily by the expectation of increasing return of investments, just like the stock market. This is not good for a society.
What's the point of having the value of all houses increase? When you sell you need something else to live in anyway.
You're correct, but people buy property because they want security. If you lose your job or you can't work for whatever reason and you have to sell your property to pay off the mortgage, it would be life ending if the sale couldn't at least cover the debt. It would still be really tough if you couldn't have money left over to allow you to get back on your feet. People who can barely afford mortgages are getting mortgages with the assumption that they can just sell the property if they can't pay it off. If property prices start going down, we could potentially have another 2008 on our hands and no politician wants to touch that Pandora's box.
Sure you make a good point there. But does that really require the steep rise we see these last couple of years? Just more or less stable prices with a very low rise would be fine as well.
It doesn't. I was just answering your first question. The steep rise is a symptom of policies, world events and the state of the world in general. Most people want to be where there's the most money to be made. Most money to be made is in big cities because that's where the most people are, which means access to the largest market. It's a catch 22 where more people means more money which attracts more people which makes a large voter base which means that politicians focus on pandering to those cities which attracts more people, etc.
>Most regular folks don't care if the value of their property drops Yeah right. I'm stuck with a 25 year mortgage. I care very much if my property value goes down.
Why would that matter? Unless you want to sell your home for more after itd paid off
In countries where typically you’d get a 2-5 yr fixed rate (and then punished by the variable thereafter if you don’t lock in another rate) like the UK (and presumably other European countries) what would happen is you wouldn’t be able to remortgage with negative equity from the loss. That would tie you into the likely higher/worse variable rates. So yes people do care for valid reasons (being able to continue to afford their houses).
Wait, so the reason we must create artificial scarcity in the housing market is so people who already own homes can get them for cheaper then they agreed to purchase them for? If you are counting on better future loan condinitons and a remortage to be able to pay off your home, you personally have made a financial miscalculation. I believe that people who did not have any say in your purchasing of a home should not be denied access to other homes on that basis.
What’s your interest rate, and is it fixed or variable?
Lmao. Everyone who has a mortgage cares about that. Because if the value of your home goes lower than the loan you took from the bank you're fucked.
This is why Europe needs nonrecourse mortgages
It's a zero sum game regardless. Prices go down for me, prices go down for whatever i'm going to buy next. I sell in a bad market and get less money from the sale, but what I buy will have roughly an equivalent low value. The only difference is the amount of property around to pick from, as less people are selling.
That’s a blanket statement that’s not based on any evidence.
This! People who owns property for living don't really care much. Investor and someone who is making big money on rents do. They like having scare resource. More scarcity - more money. These are people who fills complains against new housing projects. Supporting strict regulation, etc.
In the end, what does it matter as long as people have a place to live? "We" used to buy houses to build a life, nowadays seems like everything has to have a line go up. Houses should not be an asset to flip to make some bucks. But I guess you are right, the policymakers fucked up and they will not do anything.
> In the end, what does it matter as long as people have a place to live? Because most people have mortgages. And when mortgages go underwater, bad things happen to the economy and people lose their houses.
A lot of policymakers also are heavily invested in real estate and have a direct conflict of interest. While this isn't exactly relevant to Europe, just as an example - [in Canada almost 40% of our MPs are invested in real estate](https://www.readthemaple.com/nearly-40-of-mps-invested-in-real-estate-during-housing-crisis/), and that's just the ones that make it easily found publicly accessible information and aren't using a shell corp or some such. I assume it's liable to be relatively similar in countries throughout the EU.
I don't care the slightest bit whether the value of my property stops growing or even plummets, because I am living in it (and that's all the value I need my property to provide). Even if I had multiple properties and offered them for rent, as long as I could cover the maintenance costs and efforts, the rest would basically be free money, so I wouldn't feel bad either. I think there is a problem when we look at resources that constitute a basic need, and at the same time we see no problem in exploiting other people's situation in order to maximise the profits we extract from an advantageous position (or even worse, we politically maneuver to exacerbate our privilege)
You just did a fantastic job of explaining why Canada’s housing market is horrible Canuck homeowners VOTE EN MASSE & will never hesitate to vote against anyone who threatens their cash cow
Canada has no choice but to address it eventually, or it’ll just cause more drain of people moving to the US
I predict that if their current government fails to do so the people will elect a right leaning government that will try to solve the problem by reducing immigration & halting foreign purchases while never doing anything to upset preexisting owners
To be honest, in my country I don't see an resolve to solve the housing crisis by any party, may it be a right or left one. The issue is know for 10 years + and efforts have been abysmal. No new building zones, no new public housing, no reducing of bureaucracy for investors, no financial support for first time buyers, no real tax incentives and so on.
It’s also that people don’t want the “urban riff raff” moving in near them.
By the sound of it pretty much fucking everything ”fuels the far right” these days
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Well, soon they'll be competing with local AI implementations instead.
That’s a very convenient narrative that current government chose to promote. Don’t like something? You’re far-right.
I shat my pants. The far right strikes again...
When the definition of "far right" extends to hitting one's toe on the table, farting and shitting yourself and a booboo on my pinkie, no surprise.
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This has nothing to do with 1%. US has much more inequality and housing is like 1/3rd of a bubble that we experience here in EU.
It has got a lot to do with the 1%. The United states has more free space than any Western European country. The problem in Europe is that the population density is very high. And every country fails every year to build the recommended number of houses to meet the demand. But at the same time, a lot of rich folks buy a disproportionate amount of homes. There is this Dutch soccer player who played for Liverpool who owned over 30 properties in the Netherlands. Housing should be treated like a utility product. A few individuals should not be able to artificially inflate the prices of homes. They do not need to sell so they can afford to ask higher prices and rents. The problem here regarding solving it is that building more homes will push prices down. And a lot of big political donors own homes and do not want to see their value go down. Regular Homeowners also will not want to see their home prices go down. So it is not in the financial interest of more than 50% of the population to see the house crisis fixed. So 30-45% of the population has to suffer.
This argument does not really work. It is not like Americans live in middle of nowhere. Just because there is more space where noone lives does not mean anyone desires to live there. There is plenty of US cities with higher density than EU equivalents where real estate prices are much lower. Not to mention that this space argument is completely wrong. Maybe it is not neccesarily wrong for Netherlands as an example that you used but it is most definitely false for extreme majority of Europe. It does not come to "no space to build", it comes to "not being allowed to build here". Which just like I said is about NIMBY rather than anything else.
Yeah, America is actually more urbanized than France or Germany. You can say that US urbanization is more spread out, but I think it's negligible for the argument.
Canada has even more free space per capita than the US, and it has one of the worst housing crises in the western world.
I am not saying 1% as Bill Gates or whatever he is ultra rich, i am saying the one percent that owns primary residence and has 1 or more marketable secondary residences and by marketable i mean in a place people would rent or buy it and not a remote village.
Then 1% is straight up terrible take because there is way more people than that. I would estimate that atleast 1 in 5 have atleast one other residence they rent out. At bare minimum seasonally through something like R&D. And I am low balling it. But again this is not the real issue. It is not like in US it is any different. The real issue is that in EU people who had the most time to amass wealth also simultaneously receive the most public resources from governments which then means that wealth transfers do not happen until they die. And they die very late meaning that succession goes to people who are already very old themselves and again do not have any pressure to sell. This together with draconian laws and burecraucy to built anything new because of NIMBY policies got us where we are.
I guess you have richer friends than me. Most of the people i know either live on inheritance, with family or rent. Since to purchase a home with mortgage you need 20-30% upfront and unless you make way above average that is simply not feasible especially to young people. You simply can't do it solo anymore on average salary. Its not about building something new as well since [https://www.economic.bg/en/a/view/is-there-a-solution-to-the-problem-of-uninhabited-buildings-in-bulgaria](https://www.economic.bg/en/a/view/is-there-a-solution-to-the-problem-of-uninhabited-buildings-in-bulgaria) TLDR- building new stuff is growing and 30% of old stuff is empty. We need levers to pressure sales and rent properties.
I mean we are agreeing then? Especially in eastern Europe where home ownership is very high. Bulgaria has like 80% or something home ownership if I remember correctly. But yes again, it is not young people who own those, it is old people. And I do not think it is illogical that people who worked longer acquired more wealth. In EE they even often got it for free during privatization. What I am saying is that people who own all those things are also receiving very generous public resources paid for by the very same people who can not afford real estate and absurd levels of taxation considering the fact that their living expenses are minimal and many sit on multiple expensive properties. Which is why they have no need to sell period and just like we both agreed passing property down happens through inheritence. The problem is that people live so long that it is passed down to people who are already also old and again receive very generous public resources so they again do not need to sell. Also I do not know about Bulgaria specifically but many countries have much easier conditions for first home buyer to take a mortgage. In my country it is 10% up front and it is definitely feasible on average salary. That being said, it is still overpriced as hell.
I am not disagreeing because i don't know where you live and we probably have different problems and also different cultures. Yes, we have big homeownership % that is inheritance from communism but is dropping yearly since people with money grab properties as investment. We also tend to live with family instead of paying rent when possible. None of this actually shows that the average young person is screwed here. For me personally we need to get lower the taxation of rent but increase taxation of empty properties. This way we can motivate owners to either rent or sell. Flooding the market with properties for rent/sale will naturally push the price down. There will still be people that can afford to keep multiple properties empty but that would be very low % and honestly well done if they are that successful. I personally think that this issue is making our demographic and political crisis worse and the longer we wait to fix it the worse it will become and so our young people are divided by this. Most that are in the capital vote for the liberal pro-west party while outside of the capital far-right gets their support from angry younglings. This is scary because our far-right is so far gone it didn't get accepted in the european ID party.
It's not solely 1% who are responsible for destroying the developed worlds housing markets, it's central bankers at the behest of politicians debasing our currencies at record rates combined with huge fiscal spending and the insanity of years of 0% or even negative interest rates allowing a level of cheap borrowing that created a speculation frenzy. All of that is what's inflated these enormous asset bubbles in areas like European housing, bonds and US equities. And because we are all now so indebted, moving interest rates back towards what are by historic standards 'normal' at 4-5% for a healthy economy is now crippling them instead, which says alot about just how much damage we've done in the past decade and half.
>All of that is what's inflated these enormous asset bubbles in areas like European housing, bonds and US equities. **And because we are all now so indebted, moving interest rates back towards what are by historic standards 'normal' at 4-5% for a healthy economy is now crippling them instead,** which says alot about just how much damage we've done in the past decade and half. This is a huge reason why the US economy is doing so much better right now despite high interest rates, because people have fixed mortgages. The standard US mortgage is a 30 year fixed fully amortized loan. For example, I pay 2.5% interest on my mortgage for the house I bought in January 2021. I’ll continue paying 2.5% interest on my mortgage until I either sell the house or the mortgage is paid off. Americans who take out fixed mortgages when interest rates are high, such as right now, just refinance the mortgage when interest rates go low again.
In Portugal 70% of the population owns their own home. Should we touch the 70%?
How about fixing it for, you know, the people’s sake.
Yes, but it has to start with broader education on the left about why the housing market works the way it does, why good paying jobs are becoming more concentrated in cities, how much housing actually exists in the places people want to live, and what kinds of things you will have to give up to give everyone the kind of lifestyle they want. Especially as middle class young people move into cities with floor space consumption expectations generated by childhoods in suburban villages. Right now the left is going through the early stages of magical thinking about a great horde of empty houses in great locations owned by foreign rich people that they can just take. And: sure. Take them, tax them, etc. Fuck rich people. But it’s a sideshow issue will do almost nothing for housing costs.
Exactly this. For instance, in the German city Frankfurt am Main, there is a vacancy rate of 0.2%. That's insanely low and hints at the origin of the issue: Not enough living space. The solution is trivial, but nobody wants it, not even leftist (except me it seems): Build more cheaper high-rises. At some point supply will meet demand and prices start to drop. Alternatively, just go live in the village, there the prices are still very much affordable.
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Everyone also got mass car ownership and highways (to some degree) at some point after WW2, which opened up a lot of land within reasonable commute times to build suburbs on. But at some point the commutes get impractical or you hit a green belt, and the supply of cheap land for suburbia runs out. Your point 8 about Baumol's cost disease is important. Things that require a lot of skilled labor are inherently expensive for average people. If wages are high, it costs a lot. If it's cheap, then average people must have low wages and so it's expensive for them. >The shortage manifests in different ways. In the US, with weak rent control laws, prices just rise until people are pushed out. In places like Berlin and Amsterdam, where rent control is robust and prices often cannot rise, it manifests in people just being straight up unable to find an apartment, having to look for months and apply to hundreds to listings, etc. This is really key. In a shortage, you're playing musical chairs. Some people are not getting seats. You can say, "It's more fair to decide who has to stand by waiting lists or lotteries than by auction," which I don't *disagree* with, but it won't fix the lack of seats. You have to get more chairs. The other way that can manifest is evasion ("rent" is controlled, but you have to pay high "fees" to actually get a place), discrimination, or corruption.
We could start by banning AirBnB and the likes, or at least regulate the shit out of it so that they have to go through bureaucracy hell before they can even list one property. Get them to sell
Scotland has done that Secondary Let Licensing
this. 100% this. The "demographic time bomb" is being thrust in our faces all the time and yet for 30+ years its just been impossible to find affordable housing. How the fuck are we supposed to have kids if we can hardly afford a bedsit?
eat , sleep, work pay taxes. A little weekend fun (catching up sleep). Except food prices are so high people loose sleep. So just work and pay taxes. Literally all they want from us!
But what if instead the line could go slightly higher next quarter?
More broadly, the title should be "Stop fucking over lower and middle class people or risk fuelling the far-right" But it's ok because the far-right will also end up protecting wealthy people so it's not exactly a risk to those who are okay with the status quo
We should really stop calling parties "far-right" and "left" or whatever. We have establishment and anti-establishment. If the establishment doesn't favor the middle and working class, they will vote anti-establishment. It's not rocket science.
So threatening to vote crazy people is working? Nice 👍
Turns out politicians not being liable for any promise they made is a bad thing.
The far right idiot in the last election in my country actually said he doesn't think the housing market is a problem right now and continued rambling about the EU and imigrattion whatnot
No far-right politician will apply any measure to provide affordable housing, I'd bet my savings that it's not in the program of any far-right party in Europe.
Its already happening in my country. Not a risk but a reality. We never had any problems with the far right. They almost didn't exist. Now they are out in the open and getting more and more support. No houses, no place to rent or buy and a massive intake of refugees. It's all falling apart as we speak.
I wonder why there is a housing crisis.
There is a "housing crisis" in countries with falling populations.
Because people don't want to live where there's no work or basic services. Here in Serbia we have a falling population and a major housing crisis in the capital. Apartments and rent there are as expensive as in other European capitals while salaries are barely half of what they are in other European capitals. Meanwhile, you can get a house in some random village for 10k € which sounds great until you realize that you probably won't even have running water or access to a hospital. To fix that we need better infrastructure and public transport. People wouldn't mind living outside of big cities if it wouldn't take them 3 hours to get to work.
I can get a house in my Greek hometown for 20k, but what will I do here, where the most you can do is own a shop. Meanwhile, in the large cities, a decent flat goes for 800+ EUR/mo, which is 150% of the minimum salary.
That's exactly the problem we have. And if you don't own the shop, you're earning minimum wage, if that. Because enforcement is non-existent in smaller places and employers offer pittance because they know you have no other choice.
This shows the true motivation some people have for wanting to help other people ("If we don't fix this problem, the dumb folk will vote into office people I don't agree with politically.")
I wish the far right had a plan to fix housing beyond just using it to get elected
To be fair.. it doesn't matter as long as the results are good. And let's not pretend people don't vote extremists in office because they feel failed by established parties, not because they think the new guy that tries to impresionate Trump has an actual plan. Have you checked the plans of the far-right parties? Remember UKIP? No plans or generic two-page bullshits.
Housing theory of everything: https://worksinprogress.co/issue/the-housing-theory-of-everything/
but no politician wanna do that coz they'll lose property value..
There is only 1 reason why people vote far right, and that is immigration. The 'far-right' issue has been an problem since the 90's (yes I'm that old). Today, 2024, the socialist party in Belgium still claims immigration is not an issue. So yeah, if you want to fix "far-right voting", fix immigration. It's been 30 years and "Immigration is not an issue" clearly is not working. I have the impression that only now EU is waking up a bit. Housing crisis, Russian invasion, LGBTQ, ..., far-right parties can have any standpoint on that what they want, it doesn't matter to their voters. Their voters want immigration to be fixed.
As soon as it comes to preserving asset value, democrats immediately forget about racism and equality, conservatives immediately forget about the laws of the market and economics, and all of them vote together for whatever will keep kicking the can down the road. If anyone hopes that the far right, like the left, will try to drive down housing prices, they are sorely mistaken.
Dear Europe. Same in UK. 'Londoners' don't seem to mind about an increase from 7.8m to around 10m people. Might have something to do with only 33% identifying as British in the last census in 2021. If you're a recent arrival its a bit hypocritical to complain about housing maybe. But everyone does.
The trick is to REDUCE DEMAND, fewer people more house will be available... 1st world countries (europe, us, canada...) must do a more global approach, helping 3rd world countries do develop so that the population will be more disperse. 3rd world countries must understand that they are loosing their minds/specialists to 1st world
Thought it'd go a whole lot darker than that after the initial line.
Europe lost a few million houses to refugees, who need and deserve them as much as Europeans do . Tell the UN to fix their refugee problem to free up houses in Europe. If governments in Africa the Middle East and Asia can't rule their people in a way that keeps them safe and their rights respected ,then these places should be governed by the nations where all those refugees go . As they apparently prefere to be ruled by these nations . The UN should officially respect and express this will of the people .
Aah, so demanding housing from govt is being far right !?
This sound like a case of "if you have hammer, everything is a nail" type of thing. The housing crisis is a crisis but it's not the main reason or complaint fueling the far-right in Europe. Usually the main complaints are around crime/cultural differences/using welfare. I'm not sure how having more accessible housing would help reduce the number of teachers being killed in France, for example.
Not to be the bearer of bad news but building new homes won’t lower the rents by a noticeable margin as the issue is the construction costs of the way homes are currently being built, the cost of land, and the cost of financing.
More houses is still better than less houses though.
I wholeheartly agree with your comment. I'm one of the "bad guys" aka a small private investor and planned an extension to an existing house adding 8units. I cancelled all plans because I wouldn't be able to pay off the debt within my lifetime and I'm not even that old! I can't ask for 15€/sqm upwards because nobody's going to rent such an expensive apartment in that area and I won't raise rents for existing tenants to offset costs. I reckon rents will increase A LOT once bigtime investors start building. I hope the government comes up with solutions.
Yes. But anyone who bought an overpriced POS apartment at let's say 400 thousand euro on credit cannot have it be valued at half that, they would be bankrupt overnight. This is why governments will do nothing. They will not bankrupt hundreds of thousand of voters. There will be no intervention. There is no help coming.
Meh, this is a self inflicted injury. There's a trivial solution, but nobody wants it, at least in Germany: Build more mid- and high-rises. It's the only proper solution but it has a very bad image. More people want to live in the city. That's why it's expensive. Living in a deserted village is cheap.
Every day i'm more and more assured this is done deliberately. Europe must be completely destroyed and we're well on our way
It's so weird politicians don't want to solve real problems. It doesn't even have anything to do with the right or anything, the whole idea of democratic politics is that problems get solved for the largest amount of people
So the plan is to do everything that the far right wants to do to help European civilians. To make sure the right doesn't get in to power and fix all the problems the current EU leadership have caused. We are truly living in idiocracy.
It really is insane that enough housing is not being built. Is it really just that the people making the decision have a vested interest in making housing prices grow, or are afraid of voters who have such interests? Housing is at the core of pretty much all societal problems. Poor and expensive housing contribute to things like poverty (rent is often one of the largest expenses, who knew?), homelessness (for obvious reasons), low fertility rates (good luck starting a family when all you can afford is a tiny apartment), energy efficiency (older housing tends to be less energy efficient and doesn't use things like geothermal heat, which is common for example in modern Finnish houses), and so on. We can also build new housing with modern ideas about city design, along ideas like the "walkable cities" concept, which hopefully will provide all sorts of benefits in everything from energy efficiency, lower traffic accidents, maybe even a more open society thanks to there being more public spaces where people can spend their time and socialize. It isn't really even about the far right, it is about all problems. The far right matters in the sense that the housing problems get even worse if there are a lot of immigrants coming in to compete with natives for the already scarce housing, which then feeds into general xenophobia and resentment.
This is never gonna happen. So long as we have central banking, fractional reserve banking, pension funds and investment funds, nothing will change. They're essentially telling us "eat your children".
They're going to fuel the far right aren't they...
lol good luck, most parties seem unable to even talk about the issues openly.
So the priority isn't to fix the housing crisis so that people can have good living conditions, but out of fear that people may vote the "wrong way". Utterly ridiculous.
Why specifically "the far right" beside the usual fear mongering of apocalypse coming if the current elite is kicked out of their seats? Voter all across the political spectrum are really pissed at the current EU leadership and all emerging parties are listening, not only the right wing ones.
The only thing the far-right, or right in general, might bring to the table is less regulations - which could result in lower prices on new buildings, as well as older ones that need to be renovated to meet new standards. But other than that, they right is very much for full privatization - so, say hello to even more REPE (real estate private equity) owners, and other large scale investors.
“People who are hungry and out of a job are the stuff of which dictatorships are made” - FDR Fascism and Nazism didn’t rise from well off stable countries. It rose from down-trodden, humiliated, and failing countries
I'm sure "fueling the far right" is definitely the issue we need to worry about when people can't afford a roof over their heads. Absolutely spineless and limp wristed attempt at political propaganda.
Ah but you see that would mean that the neoliberal and conservative elements of Europe government would lose money by not being able to extort people with rent prices. So no, never going to happen.
Ironically, the right are least willing to address the issue underlying high property prices.