9 ms·

Building new inventory and making housing more affordable would dissuade individuals from buying new homes?

by aperson_hello 3y ago

zamalek 3y ago
Real estate is often seen as a safe investment. If property prices fall then it is no longer an investment.
- drekk 3y ago
  It's a "safe investment" because people need a place to live and the supply is artificially constrained. Personally don't see why the barrier to having a place to live for new generations should be raised just so that boomers can guarantee returns on an asset.
- HWR_14 3y ago
  So the harm is people will invest in the stock market instead of buying real estate to rent out?
- polygamous_bat 3y ago
  > If property prices fall then it is no longer an investment. So people who want to park their money in a house rather than living in it are discouraged to buy up the available housing. Yup, good. Seems like it should be going exactly as expected.
  - deleted 3y ago
    [deleted]
  - mortureb 3y ago
    Good if it’s nationwide but that’s not the case here. You’re just going to have a city with no development besides the one carried out by government.
mortureb 3y ago
Why buy now when prices will be lower in six months, or a year from now. Why develop new housing blocks (as a private developer) if it is a depreciating asset.
- bondarchuk 3y ago
  >Why buy now when prices will be lower in six months, or a year from now. To live in the house. >Why develop new housing blocks (as a private developer) if it is a depreciating asset. To sell to people who want to live in the house.
  - mortureb 3y ago
    >to live in a house I’ll just rent until the price bottoms out >To sell to people who want to live in the house. People won’t buy and you’ll be stuck renting.
    - bondarchuk 3y ago
      Either renting is so bad that people will still rather buy the house, or renting is actually not that bad and then it's not an issue if people rent instead of buying the house. It can't be both at the same time. Also I think your calculation of "rent until price bottoms out" only makes sense if the price is dropping by more, each month, than a month's rent. Idk but that seems like a dramatic drop.
    - polygamous_bat 3y ago
      > I’ll just rent until the price bottoms out Rent what inventory? If everyone wants to rent the monthly rent goes up until the market reaches equilibrium. Once again, look at cars. Do you see a majority of the people renting cars because "prices will be lower for the same model next year"?
      - mortureb 3y ago
        Not if the government keeps building new housing like this article is mentioning. There will always be supply. Like I mentioned in another comment it’s different if the housing is being built simultaneously nationwide, like Japan, then people don’t have an option. That represents a nationwide shift in mentality where housing is no longer an investment. Cars are pretty evenly priced across the nation (within a few thousand) so people don’t have an alternative. But that’s not the case here.

Building new inventory and making housing more affordable would dissuade individuals from buying new homes?

zamalek 3y ago

Real estate is often seen as a safe investment. If property prices fall then it is no longer an investment.

drekk 3y ago
It's a "safe investment" because people need a place to live and the supply is artificially constrained. Personally don't see why the barrier to having a place to live for new generations should be raised just so that boomers can guarantee returns on an asset.
HWR_14 3y ago
So the harm is people will invest in the stock market instead of buying real estate to rent out?
polygamous_bat 3y ago
> If property prices fall then it is no longer an investment. So people who want to park their money in a house rather than living in it are discouraged to buy up the available housing. Yup, good. Seems like it should be going exactly as expected.
- deleted 3y ago
  [deleted]
- mortureb 3y ago
  Good if it’s nationwide but that’s not the case here. You’re just going to have a city with no development besides the one carried out by government.

mortureb 3y ago

Why buy now when prices will be lower in six months, or a year from now. Why develop new housing blocks (as a private developer) if it is a depreciating asset.

bondarchuk 3y ago
>Why buy now when prices will be lower in six months, or a year from now. To live in the house. >Why develop new housing blocks (as a private developer) if it is a depreciating asset. To sell to people who want to live in the house.
- mortureb 3y ago
  >to live in a house I’ll just rent until the price bottoms out >To sell to people who want to live in the house. People won’t buy and you’ll be stuck renting.
  - bondarchuk 3y ago
    Either renting is so bad that people will still rather buy the house, or renting is actually not that bad and then it's not an issue if people rent instead of buying the house. It can't be both at the same time. Also I think your calculation of "rent until price bottoms out" only makes sense if the price is dropping by more, each month, than a month's rent. Idk but that seems like a dramatic drop.
  - polygamous_bat 3y ago
    > I’ll just rent until the price bottoms out Rent what inventory? If everyone wants to rent the monthly rent goes up until the market reaches equilibrium. Once again, look at cars. Do you see a majority of the people renting cars because "prices will be lower for the same model next year"?
    - mortureb 3y ago
      Not if the government keeps building new housing like this article is mentioning. There will always be supply. Like I mentioned in another comment it’s different if the housing is being built simultaneously nationwide, like Japan, then people don’t have an option. That represents a nationwide shift in mentality where housing is no longer an investment. Cars are pretty evenly priced across the nation (within a few thousand) so people don’t have an alternative. But that’s not the case here.