Why would it collapse? There’s insatiable demand for extreme limited property. Interest rate hikes may lower the price of property but the interest will rise proportionately.
Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.
If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming.
And housing is expensive by design and not by constraint. I'm staying in KL, a comparatively cheap place by Western standards. The housing market is crap here from a seller perspective as you have an over-supply of condos. That, despite the large amount of foreigners living here.
You can fix Western supply issue by allowing high-density condos nearby cities. Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses.
> If it doesn't collapse, then society may collapse?
But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society.
I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's never the most fun solution, but it is a solution.
When I was in my 20s I wanted to live in Manhattan more than anything in the world. But I was never able to make it happen, it was too crazy expensive even back then. Eventually I gave up on that dream and moved to a place that was cheap and was able to buy a house no problem. It's no Manhattan, but it is home and has been a good place to live for decades now. In hindsight it was a great decision to move away and buy a home in a cheap area instead of banging my head against the impossible real estate market of NYC.
It's always an option to move to a cheaper location!
But there are plenty very cheap areas to buy houses or rent. Sure, many people don't want to live there, that's why it's cheap today. But it is a possibility nonetheless, one that is better than collapsing society.
I'm always honestly confused why today it is seen as impossible to move to a cheap area? People have been doing this for generations (centuries?). It's never the most fun solution, but it is a solution.
Jobs. Most people don't have the luxury of working fully remotely. Areas with cheap housing are overwhelmingly geographically isolated and economically depressed, which is why the housing is cheap - local residents simply can't afford to bid up the price of housing.
A lot of people would rather struggle to make rent than raise their kids in a community with high crime, bad schools, poor healthcare, limited prospects and a general atmosphere of despair.
What good is a job, if it doesn’t cover your expenses, doesn’t allow you to save any money, is located in an area where there is no affordable housing, and restricts you from doing normal, societal things like having children.
I don't know the US situation, but in my city in Europe, there is a factor 2 to 3 for flats in fashionable location compared to my location. I have the same traveling distance to the city center, but my location has less public transport options. Schools are ok, it's even better than in the fashionable district, and I have less criminality.
I've spoken to a few colleagues who just arrived in the city from another region, and they all went into the fashionable district without considering any other locations, because someone from that district told them any other district is bad.
The fact is that if you bought your flat in this fashionable district, it doubled in value over 7 years, whereas in my district, prices went up 50% at most.
For me it is the same as the stock market, people follow the trend and smart folk get out before it goes downhill.
> Jobs. Most people don't have the luxury of working fully remotely.
Then you commute. Yes, sacrifices are required but it's not the end of the world (or collapse of society, as GP put it). When I moved to a cheaper place over 20 years ago working remotely wasn't much of a thing so I had to drive 60-90 minutes (occasionally 2 hours). It wasn't great but it was a pragmatic solution that allowed me to have a nice place to live and leftover money to save.
> A lot of people would rather struggle to make rent than raise their kids in a community with high crime, bad schools, poor healthcare, limited prospects and a general atmosphere of despair.
There is a very wide gray area of reasonable places with reasonable prices between the extremes of San Franciso/Manhattan vs. economically depressed areas with "a general atmosphere of despair".
> It's always an option to move to a cheaper location!
If you’ve got no savings and are trapped in debt, how do you suggest people do this? How are these people managed to scrape together the deposit and moving costs? The people who would need to do this the most are locked out of it. If you don’t have family members to stay with, what you end up with is skyrocketing homeless numbers which seems to be what is happening in California.
Sell all your furniture and all but irreplaceable and critical belongings, possibly including selling any cars you may have. Use a few thousand dollars of that money for airfare or gas money and move yourself and minimal belongings to a new location. Stay in a long-term-stay hotel (<$100/day) for a week or two until you can get the cheapest apartment you can find. Slowly repurchase essentials as needed. Done.
> Sell all your furniture and all but irreplaceable and critical belongings, possibly including selling any cars you may have. Use a few thousand dollars of that money for airfare or gas money and move yourself and minimal belongings to a new location.
We’re talking about the poorest people in society here so let’s assume they don’t have a car. And they’re probably not taking a flight anywhere, they’re most likely taking a greyhound bus if we’re running this thought experiment in America. How many thousands of dollars do you think they have in furniture? Do you really think it is going to get that person out of any existing debts they have, and then leave them with multiple thousands of dollars to spare? Because if you’ve got $1500 dollars and the hotel room costs $75 a night, you’ve got 20 days to find this cheap apartment and find a job in this city where you know no one before you’re homeless. In reality, you have less time because you’ve got food and transport costs on top of that. Oh and now you’re probably not getting any benefits because you’re in a different town and probably have to go through the system again.
Do you really think this is a good way for someone to turn their life around or do you think that the desperation of their situation means it is far more likely they are going to get exploited by both landlords, employers and possibly criminals in this new town, made all the worse by the fact that they don’t have any contacts and zero support network?
I started looking for houses in 2005-2006. The outlook sounded similar, constant prices going up and missing out. House flipping was booming and I was priced out of all the desirable areas. What I did was start near where I work and move down the line farther out getting to less desirable towns. 2008 hit and at that point mortgages dried up. I finally got a house in 2009, in an area where schools were not as good and was not as desirable and prices fell for the next few years where I felt like I over paid. With all the money I put in , being a fixer upper too, I just assumed if I sold I’d simple take a loss and move on with my life. Now, a decade plus later the area has moved from less desirable to decent. In the end it worked out. Once again today though the same areas I couldn’t afford are still the desirable area. People want the cute down time I was priced out of 15 years ago. There are still towns that are more affordable.
> And you stroll into whatever town/city/village with your income that barely meets the cost of living in NYC/SF/LA and destroy that housing market.
There's a lot of truth in that.
The ubiquity of remote work has made this much worse. It used to be that one could move to a cheaper area (as I did) but it still had to be within orbiting distance of a source of income.
Remote work broke that constraint which is causing a lot of disruption in very remote areas.
Also the other obvious answer that people have been doing for centuries is multi-generational households.
It's not the end of the world to live with your parents (or your partner's).
I think we could see a lot of pressure towards that as Western total fertility rate continues to decrease and larger population groups (Millennials) age with fewer or no children to help out.
Even a shift towards non-relatives households wouldn't be the end of society, it would just be change (and require some zoning/code changes).
> Also nothing signals undateable more than "I l[i]ve with my parents".
This is cultural though. In the US that certainly seems very true. In other places (such as where I'm from), living at home with parents until marriage is the normal default.
Cultural...and economic. I guess in places where there are arranged marriages, or living together is shunned upon, this is true. However as far as I can tell generation z is complaining about the economic situation that disables them from moving out. So it's definitely not cultural there.
Manhattan is one of the most expensive places in the world. I would guess most ppl are not really aspiring for that. I would guess that the problem for a lot of people is to continue being able to live in their medium sized city where they have all their friends, family and life.
Around here in the North East of UK you can easily buy a house for around £100k. It won't be amazing or anything, but with banks offering 5% deposit mortgages pretty much anyone can save up for it and get on the property ladder. Of course the situation down south is completely different and the closer you get to London the more impossible it gets to ever buy your house.
For comparison that’s about 5 times minimum wage at 35 hours a week. You’d struggle to get a mortgage on your own without a £20k deposit but as a couple certainly no problem, and many entry jobs in supermarkets etc pay more than minimum wage.
You can buy flats in beautiful, historic city centre in Bytom, Poland for $500 per square meter. There are even well-paying coding jobs in the area (within 30 minutes by car or public transport).
> Could you point me to these plenty cheap areas? I work remotely and may consider moving there.
They are all over. Head over to zillow/redfin (or the corresponding real estate site for your region) to see them. They won't be in the hip city center everyone wants, but choices are plentiful if one is willing to sacrifice a few wishlist items.
"Cheap" is of course relative the the region/country so actual numbers will vary. I'm in California so I can give a California-centric answer.
Browsing zillow I see over 30 condo (and a few house) units for less than 200K in the Sacramento areas (not exactly the boonies, it's the state capital).
In the Fresno area I see around 60 units (many houses) under 200K. Some friends moved to Fresno and they have a very nice place, for pennies on the dollar compared to San Francisco.
For those who don't want a big city, head north of Sacramento towards Oregon and tons of choices to work remote and buy a place cheap.
Mind you, I set the search limit to <200K, but that's extremely cheap by California standards. Even 25 years ago 200K was a cheap house in California. If you increase the search criteria to a more reasonable 300-400K there are way more choices and areas.
Plenty of cheap areas, in many countries. Just have to give up things like jobs and services(both public and private). But they do exist. And aren't desirable for exactly those reasons.
In Sweden if you move from Stockholm to Eskilstuna (1h30m drive away) you can find a 5 room 100 sqm apartment in the dead center of the town for the price of a 2 room 45-50 sqm apartment in any of the immediate suburbs of Stockholm.
Or, to put it simply, move out of the big city, and the prices drop by a factor of two or more.
That's true in Germany as well, but to get cheap property, you have to go very far from the city, and Germany not being that huge, you'll be close to the next metro area by then.
Like, sure, a 120sqm house might be 400k in Hamburg and only 230k 60 minutes out to the north west (both needing an additional 25-50% of price in renovation costs), but the average net income is 30k/year and you're expected to have at least 20% in cash.
You can get very cheap houses in Saxony or Mecklenburg-Vorpommern, but there will be little to no infrastructure (like, the next gynaecologist might be a 60 minute car trip away), your neighbors will be down on their luck, unemployed and voting far right, and you'll essentially need to rebuild the house - and you'll need to do much of it yourself because the tradesmen work on construction sites in the big cities and rarely take local jobs.
We've been living in Berlin for the last 10 year and the prices are making me consider looking outside the city (no other big cities that near Berlin, so there isn't that challenge you speak of).
My main issue would be being more socially isolated as all of our local friends are in Berlin, kids having to adapt to new school/kindergarten (& find new friends), new work for my wife who doesn't work remote (but can find work relatively easily)...It's not impossible but it really sucks that we'd have to leave the city if we want a slightly bigger home (we've 2 kids who share a room & our apartment is in general feeling a bit small for a family of 4).
Without a large windfall I don't think we'll ever be able to afford buying a 3+ bedroom (4+ rooms as Germans count it) home in Berlin & rent would be high enough that no landlord will want us with our current income.
Yeah, doing it with kids is extra hard. I have friends in Berlin who moved to Prenzlauer Berg in like 2005 and got a great deal. At some point, with kids that apartment just didn't cut it any more, but they can't move too far for the reasons you mention, so they looked long and hard and accepted paying quite a bit more and moving to the other side of the Ring in Pankow. Not as nice, but close enough to keep the kids in the same schools.
I had hoped that remote work would relieve some of that pressure, but maybe it'll take a generation because many couples can't move anywhere because only one of them can work remotely, or because they don't want to uproot their kids. Not to mention that you'll still need a solid internet connection to work remotely, and that's still hit and miss if you go more rural. And if nobody wants to move to Saxony, the empty villages there don't really do anything on the supply side.
I have many friends in Brandenburg (the state, not the city) and internet speeds tend to actually be great out there from what Ive heard (still in the towns/cities not literally in the middle of nowhere, but there are loads of small to mid sized towns). In fact I believe it may be better than in Berlin!
I wonder if it was because it was easier to upgrade/replace the East German infrastructure & as such it's relatively new/good? Sorta like how nice a lot of the highway network in Poland is, because it was mostly only built in the last couple decades.
BTW Pankow is considered a very nice and desirable (and expensive) part of Berlin to raise a family in :)
I guess Pankow is also pretty large. The parts I stayed at had mostly wide streets with lots of traffic, but it includes Prenzlauer Berg and goes all the way to the north, so it'll have plenty of different places. And gentrification likely changes it as well.
You're right about small towns, they're probably a good compromise before looking at villages, but it is a very different life style, so probably not for everyone that currently lives in Berlin or Hamburg by choice. I'm curious how it will develop, and I feel fortunate that my personal preferences align with what's cheaper. I feel for those who desire the hustle and bustle of the inner city.
I like to browse the real estate market just for fun sometimes and actually yes there are cheap areas in every country. Some are cheap due to remoteness, due to inventory or mismanagement/decline. Like in mentioned in another comment, (south) Spain has incredibly cheap properties because there are many available and mortgages are available to even non-residents (not necessarily _in_ cities, but within a 30 min radius from population centers). Generally speaking 15 minutes inland from the sea is cheap everywhere (apart from luxury pockets like Marbella), you can easily buy a nice mediterranean villa for less than 200k. If you want views that's around 250-300k.
More generally, cheap areas often means economic underdevelopment or decline, which leads to social problems and annoying neighbors (on account of drinking, unemployment and other issues). On the plus side, there's less traffic, because people aren't as busy going to places to make and spend money as they are in economically vibrant areas.
It also means that there’s less money available for infrastructure maintenance. While a city is expanding, the majority of the housing is occupied, and the infrastructure to support new housing doesn’t yet require replacement. As a city contracts, there are more unoccupied houses and vacant lots. There’s still the same length of water, sewage, and power lines along the length of a street, but fewer residents to pay for it as it becomes old enough to need repairs/replacement.
That's not really a factor here as most of the housing stock is made up of holiday homes so you only have neighbors for like 2 weeks in a year.
But with remote work many more are making it their homes so it might be a problem in the future.
If you're in the USA, the Rio Grande Valley is pretty cheap. Because it's next to Mexico, there's huge amounts of Latino culture & influence.
If you want to be somewhere that feels on the up & up and has cool stuff, Brownsville has a decent amount of engineers for SpaceX and you can go watch launches from a public beach if you get there early enough.
That you have more shops than one. More restaurants than one. Theaters. Clubs. Sports. Connectivity. Places and activities for kids. Places for hobbies. Concerts. Other various activities and events.
There are significantly more of each in a big citu.
> That you have more shops than one. More restaurants than one. Theaters. Clubs. Sports. Connectivity. Places and activities for kids. Places for hobbies. Concerts. Other various activities and events.
Then open a shop, start a restaurant, start a theatre group, gather some kids for sports, organize some concerts, and become an active member of your community, instead of expecting it to be handed to you on a platter.
Maybe you missed the whole discussion which was stemmed from complaints about big cities and the frustration many people are finding with being able to save any money, purchase or rent a suitable home, live in a safe neighborhood, avoid long commutes, or raise a family.
Life is more than just buying lots of stuff and experiences from other people in big cities. Giving back to your community and allowing them to enjoy your talents should enter the equation too. Don’t always be a taker.
Bigger cities are the same. Politically they are very homogeneous. If you want want you kids to be near variety of perspectives, you should move to a smaller city or near one.
My conclusion comes from statistics and logic. In smaller cities the population is a mix a between daily rural migrants, factory workers and office/service workers. In big cities the population is mostly office/service workers.
>>Maybe I'm just tired of being around people who feel the existence of cities is a personal affront.
It's a bit ironic mentioning that here, because there is a pro urbanization (anti rural, anti suburbs) article on the front page of HN almost every week. And every dominant media in the country promotes the same narrative.
> If it doesn't collapse, then society may collapse? Like the sibling comment mentioned, you can only push this too far, and I think it's pushed too far to be very alarming.
First off, what are they going to do? It’s the same in most big cities(1 million+). Second, those working remotely can always move from Munich to Leipzig (where OP can rent 3bd for the price of his Munich studio). I don’t see society collapse happening. Just need a bit of population redistribution.
A lot of service industry people can't afford a long commute. So even if the property is cheap X hours out, they still can't afford to live there.
And that's how you get what you're seeing in many cities - uninhabited property deserts where the houses/apts are nominally inflating in value, but most people can't afford to live there. And those can afford it don't want to because there's no one around to keep the lights on for them.
Portugal is threatening to repossess empty properties through compulsory purchase. That's drastic and not very popular - especially with property speculators - but govs are going to be faced with a choice between that kind of drastic action and cities which gradually empty of people.
It’s compulsory renting, not selling/purchase. Either way it’s yet another ridiculous move from the left ( in this case ) that doesn’t solve anything and it’s feasible only in the minds who never had a real job outside politics.
> Young people will prefer to live in these 20-sqm things (and have shared amenities/no car) than lose a significant percentage of their income to housing. Of course, some of the powers are holding on this because it'll affect their artificially made limited supply of houses.
The people most vocally opposed to these buildings (which I support) in the United States are liberals/progressives who say those types of living situations are unacceptable, and hold out for the magic beans of large apartments/houses at well-below market prices. Unsurprisingly, this only makes prices go up.
An answer could be land trusts. A land trust that is sufficiently capitalized would be a capital partner to help buyers buy at current market rates. When these new buyers sell, the land trust stipulates the price they can sell at. We have these to a limited extent in New England, and they may exist elsewhere. The problem is, at this point, only a currency producing entity like the Fed would seem to have the wherewithal to capitalize such an endeavor at a scale needed to substantially change things.
You can twist the supply demand imbalance only so much. Go farther than required for longer than required, and some cracks will eventually show up. Like they did for Silicon Valley bank.
So it is hard to say when those cracks appear since the global market is quite a big market and can sustain imbalances for a long time, but then the bigger the bubble the bigger the crash.
Foreigner limits, tax on no. Residents, start of uncontrolled construction - these are only some ways I can think it may break and my ideas are based only on reading the internet, you never know what dynamics come and break the housing. Or they break the world or its money supply.
Not trying to fear monger just saying the dance will end.
I think the difference here is fundamentally there is insufficient supply for the demand of housing globally, or at least US, UK and EU. The previous generation made new builds extremely difficult or impossible in many jurisdictions.
Well, EU isn't just one place. In Poland for instance building is very deregulated with very few cities having any kind of zones - basically if you can buy some land(and land is cheap) then you can build your own house. My own grandma built a house for herself to live in just before the pandemic - 120sqm of space, 2 beds 2 baths, with really large garden and construction+land+permits cost her a total of about $80k USD.
A friend of mine just got married, they bought a piece of land from the local council for about $20k USD and are looking at buying some house plans to start building this year.
From an outside perspective that seems to be a problem in many other countries - either the lack of land to build on(I can believe that in the UK but maybe not so much in US), or insane zoning laws that just straight up prohibit you from building something.
> But there's abandoned medieval villages (no plumbing or electricity so far...) in hilly rural Italy.
there's small towns with fine electricity and plumbing in rural Italy but they are de-populating anyway, cause most people want to live in/nearby cities as that is where money and opportunity generally is.
The same everywhere I think (bar few cases like the Netherlands which are basically a single sprawl).
Hungary just published their most recent census, and all of the country has depopulated in the last ten years except for Budapest.
The big hope is that the trend will reverse with more remote-ization, but it's, well, a hope.
zoning would not matter to my commute length unless I moved every time I changed jobs and had no dogs or human partners. I have made 30 years of compromises because of partners and pets. I've stayed at shitty jobs because good ones were too far away and I could not move.
building near jobs is either building company towns or embedding classism and environmental injustice into property. would you live next door to a small nuke power plant because it was colocated with your office job? how about a refinery? a bsl3 lab? sewer treatment? or would you force those workers to live near their work and put them and all the dirty parts of civilization far away from the upper class clean places?
I live next to a coal power plant. It's a tradeoff between my ability to pay the rent for a single family home with a garden and living close to a large city in Germany that gives our family the chance of job and education variety.
If it was that, then some jurisdictions would be doing much better than others.
Unless the parent generations all decided to make new housing construction hard, all over the world. In which case it seems likely that whatever changes they made were for a good reason, if they could all agree on it.
Eventually death, disease, or divorce will force properties to sell. That will move market values down. Meanwhile, my buddy’s mobile home manufacturer is back to being able to output a home in weeks. Construction has already fallen off a cliff-which makes sense given that’s the easiest to spin up/down of the market.
The RE market is responding to the rates. Though, whether it’ll be enough is beyond my knowledge or possibly anyone else’s.
If not, it’s precisely this sort of situation where change seems impossible that people can find the will to insist upon change.
For renters, I suspect regulation and oversight would go a long way. It’s not going to create a NYC level inefficiency if gobbling up SFHs for rental properties is curtailed. (And I’ve heard of at least one story suggesting AirBnB rentals may be unable to rent at current prices/supply.) Nor would outlawing problematic practices create problems.
In the west, people largely have a say in their governments. People just need to show up to elections and primaries with the demand that government work for them.
When I went to Newark 20 years ago the road I was on looked like an abandoned waste land. Today the area has multi level family houses and looks more like a walkable area. Ascetically it looks much better - if it’s really a better place to live I don’t know. It’s likely it needed massive investor cash to rebuild so I’m honestly not surprised.
I went to college in Newark from 2006-2012. Essentially the beginning to the end of the Booker era. Yeah they make a big stink about the new developments and how Newark was "Revitalizing" itself.
Nonsense: It was a dump when I started and was still a dump when I left. The thing is you don't realize it until you have gone to a place that has not had Newark's issues. Only then do you realize how much further they have to go.
I have been wondering about that. I’m not entirely certain of the effects either. Being held by corporate investors should mean they would be divested in certain circumstances, though.
Residences owned by corporations funnel wealth away from the community into the hands of the corporation. Renters also tend not to establish as deep community roots as there's no investment in the house or the neighborhood and they may move.
While on the surface that isn't "bad", when this happens in lower income neighborhoods it siphons what little wealth that is there away.
Additionally, as there's no investment in the house (call up the landlord and have them fix it up... in a while), it also means that the properties in the area tend to decrease in quality and make the homes that are owned occupied less valuable over time... and the community there less cohesive.
All these things together make it harder for people (frequently minorities) living in those areas to improve their lives and that of their children (can't leave a house you rent to your children or grandchildren to help them get a firmer financial footing as they reach adulthood).
As people die, etc their high paying jobs will be granted to new people. Some of which I suspect are real estate Marxists that will quickly become real estate centrists or conservatives. If you look at the math it sort of looks like this:
There are certain places people want to live and this is mainly a 2D geometry, with certain cases of 3D to a limited extent. 3D will always have detractors since it doesn't fit, it kills light, there aren't services to support the density, etc. There's a never ending conveyor of excuses, some which are actually legit. You aren'r building Manhattan again in the West. So as we grow we are forced to grow outward more than upward, and as anyone who has done a 4th grade pizza problem knows how that goes. Geometry! Applying math skillz to "real life"! Who knew?!
Now secondly, lets look at economic and class structures. We like to say "the middle class is vanishing" and that's partially true. But the implied place all these former middle classes are going, the lower class, isn't quite right. Today, the upper middle class is the largest it has ever been. Around 30% of the population (assume the top 1-2% are the upper class). That's huge and these are the people that can actually afford the "nice places in nice places". They throw a bone to a black person or a teacher every now and then via "equitable affordable housing" - just enough to keep the polls working, but never more.
So what we have here is a lot of people who think because they went to college and have an unimportant role in a middling corporation that they deserve a DREAM HOME in a PREMIUM LOCATION. There ain't that many of those. Especially when you consider that 30% of people are really pretty well off due to income in certain cases and inheritance/genes in others. A good friend of mine makes a shit wage and owns a 2M home because RICH PARENTS bought the house. They're still rich even after that! You just ain't one of them. You need to do it the hard way and earn it, like I did.
There are winners and loser and most people feel like they're a winner, or at least did all the things that winners do. But it's a crowded trade today. Good luck.
In Japan, there are empty houses going cheap as old people die off. In a few decades, possibly there will be some effect as the de-population bomb from lowered birthrates globally begin to affect real estate prices. Let's hope.
1) Very insulated culture with nearly no immigration coupled with low birth rates.
2) They build houses very differently. They aren't generally made to last centuries if taken care of and renovated. The strategy is to build small units cheaply and tare down after 2- years. It's like Ikea for homes.
3) I agree, depopulation is a problem. We really need to incentivize middle and upper middle class people to have large families.
> 3) I agree, depopulation is a problem. We really need to incentivize middle and upper middle class people to have large families.
No, what we need to do is figure out how to run our economies without pyramid-scheme population growth. Human societies have managed to do this sort of thing for centuries, before the industrial revolution, and then the green revolution ballooned our population.
Surely, we can turn some of those productivity gains that technology has given us over the decades to solve the problem of a slightly smaller than-what-we're-used-to wage-worker-to-non-wage-worker ratio.
It's completely possible, but it may require the capital owners to take a haircut.
The first thing we need to do, in my opinion, is tackle inflation by getting government out of the picture. I think inflation is the root cause of a large chunk of what we don't like and complain about with capitalism.
I have yet to get a valid reason as to why inflation is an inherent and necessary property without circular reasoning. The market will always reach some equilibrium, even with a fixed money supply.
External incentives to have larger families don't work.
Hungary tried giving approx. 30k EUR (a very large sum, locally) to every family who have 3 kids plus other significant tax incentives like 0% income tax rate for life for mums of 3, and afaik these programmes are still on but looking at birth rates it resulted in a 0.8% blip and is still in a sharp downtrend.
item 3 is solving the wrong problem. people will have babies when they have space and feel like they can give their kids a better future. trying to move people into dense urban living it the opposite of space needed for kids. right now, we cannot give kids a better future in the current billionaire run world.
we need to depopulate the billionaires and with the freed up wealth, fix the environmental problems so we have a chance at a future.
as a rule, billionaires don't create wealth. They play games with power, accumulating wealth locked up in financial engineering systems that produce more wealth by taking money out of the hand of real wealth producers. The people that create wealth are inventors, scientists, engineers and laborers that create, figure out how to make and move the product out the door. capitol is needed to produce goods but is not the only recipient of the results of work.
"Having space and feeling like they can give them a better future" is about 1 thing.
Money
If you eliminated any of income taxes, or a combination of SS + reducing deficit spending (inflation), or the % of income going to heakthcare by eliminating its employee and employee subsidies (Medicares), there would be a populatiom boom.
All you need to do is free people from having to make money, to meet basic needs. And people Will have children again.
Instead, we have a social policy that everyone just needs to work in order to pay for the sins (and pleasure) of their previous generation.
Yes. Those Caribbean cruises , FL homes & racetrack bets, are paid by the empty silence of hospital newborn wards across the country.
> All you need to do is free people from having to make money, to meet basic needs. And people Will have children again.
This meme needs to die. People in poorer countries have more children than people in rich countries. Within countries poorer communities have more children than richer ones. There might be some exceptions but this broadly holds true across the world.
the opportunity cost of a parent in the 3rd world is negligible. income is very low as it is. theres not.much to do to make $$.
therefore, the benefit of parenting is MUCH higher, and the cost of raising a kid itself is low to zero , and in some cases positive (kids work on fielda or take care of siblings, therefore ROI is positive).
contrasts this with USA, where the opportunity cost of a developer to raise a kid is in the 200k level. ok so now what about alternatives for parenting?
well everything is regulated (daycare, schooling , extracurriculars), or hyperinflates (real estate), and every activity carriea an institutionalized bloat of an effective ponzi...to the benefit of the prior generation seniors in every activity.
So now what do you do? If raising kids is negative ROI and doing it yourself has a huge opportunity cost?
Is it a coincidence that wealthy families in wealthy contries like in Singapore, have more kids on average?
I think we need to change the income tax code to massively incentivize people to get married and have kids. I’d support increasing the tax rate pretty massively and then introducing a tax deduction of like $20k per kid.
For instance a couple with 3 kids and a home would have around $70k-$100k in deductions (60k kids, 10k-40k in state/local taxes etc). If they had an income of $120k it would be adjusted to like $30k and they’d pay essentially no taxes.
It’s a deduction and not a credit specifically so people that the state isn’t incentivizing clients of the state to have kids.
Hungary tried exactly that (basically 55-60k EUR/USD free to each couple that said they want 3 kids plus 0% income tax for life for mums) but it didn't work. It was a 0.8% blip but that's it.
Maybe it would be different in the US because in europe healthcare and education is already "free".
Since you believe that human reproduction is a de-facto property of the state, simply calculate how many women should have babies, for optimal society, and force them to?
No need to muck around with some tax incentives. Redistribute the true source "commodity".
As a bonus, if you're high up enough, you might even get to choose who mates with whom.
There might be a pretty huge gap between incentivizing responsible people to create families and own property (these are very good things for a country and society) and forcing women to reproduce and with whomever the government assigns to them.
What I mean by that is using a deduction, not a credit. You aren’t paying people to have kids but rather incentivizing people that are financially independent by lowering their current tax burden while they have kids <18. Their surplus of kids will more than make up the tax revenue down the road.
For poor people you continue to focus on helping with basics (food and shelter), family planning measures, and up-skilling towards becoming independent. Since a deduction probably isn’t helpful in these cases, a tax credit would continue to exist.
It's not implausible that changes in technology and life/work habits will ultimately make currently highly-attractive areas less so. And once population starts to fall in combination with minimal wage growth it's hard to see what would sustain current high prices.
Ultimately it seems the primary driver behind property prices is the willingness of buyers to take on debt and for banks to issue it. If house prices did start to plateau/drop off over a sustained period with no obvious indicators of future growth then that willingness (particularly on behalf of banks) may well drop off pretty quickly too.
Why would it collapse?
Nobody is able to afford to buy/live in your property anymore.
If you don‘t find buyers/renters how will you manage to pay off your investment credit you took out at 95%credit rate while only covering contract signing fees at ~1% interest with 10year stable interest.
Once interest is adjusted after 10years to 4-5% you (property owner that can’t find any high paying renters) are fucked
In the USA your interest rate is fixed for the term of the mortgage. There are exceptions but they are comparably extremely rare.
I think you have a good point though regarding places that reset interest every n-years. People will struggle to make payments. It will be interesting to see what happens in places like Canada. I’m guessing millions more people on the governments teet. I assume the current admin wound love that.
I don’t know about your country. But in mine prices of property has not followed population growth, increased income or really anything that would make this growth sustainable. It has been a product of central banks setting way too low interest rates (and to a part lacking regulations).
Interest rates don’t really matter as much as you might think. Yes as rates go down the price a house sells for goes up. But the monthly payment stats the same as that’s how people buy houses. They figure out what they can spend easy month in principal, interest, and taxes and then shop and bid in the places they want to live, which almost always aligns with how much they can spend.
Rising interest rates are good for cash buyers and banks.
Are actually rising rates good for banks? Didn't SVB fail due to rising rates? And the other banks might also have issues. They got deposits. They lend out money, but they locked the loans to certain rate. Now the depositors can get better offers from elsewhere, but they can't always renegotiate the old rates. Thus they end up with possibly losing the deposits.
> Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.
Well, the economic landscape can change drastically. Compared to other assets real estate has quite some costs. With all the environmental regulations, for example, the EU is planning, real estate might be much less lucrative. For individual landlords, it might be even impossible as they don’t have any money for investment.
I’m not dismissing your point. Just adding some balance.
Do people really think at sone point no one will want premium property and I’ll finally get it cheap? Of course that will never happen.