Comment by bix6
5 hours ago
House prices are out of wack anywhere desirable because the local income is irrelevant when non-locals are allowed to scoop up the local supply.
5 hours ago
House prices are out of wack anywhere desirable because the local income is irrelevant when non-locals are allowed to scoop up the local supply.
This is a common opinion that never actually matches the facts.
The issue is all the things blocking supply. As long as supply is blocked, prices will go up, Period
House prices are only "out of wack" in areas with poor social housing programs.
Housing in Vienna is still affordable, only due to their very successful public housing programs. Public housing can be both beautiful and highly affordable if you want it to be, it's not like we don't know how to make good quality homes with lovely public amenities. It's mostly developers that want to skim on everything while selling it at the highest cost possible.
Poor system if this is the outcome: unaffordability.
I am interested in what is working in Vienna when “housing problem” is what almost every city in “the West” has or thinks it has.
To me it seems to be a combination of
- wealth inequality (eg 20/30 trillion dollars was printed and furloughed out in Covid, which funnels its way up to the holders of the most assets, seeing asset price inflation but no attempt to tax back the money printed). Repeat on different scales for unfair tax systems and poor infrastructure and and and
- urban planning (we think the ideal city is dense using seven storey or so apartment buildings and fairly aggressive anti-car (ie far less parking than seems possible) with better public transport and lots of pedestrian access. This describes almost no cities
- mortgages and other pro house incentives. You want house price inflation for decade after decade, just allow people to borrow a greater ratio against their salary — and allow married women into the workplace. Suddenly turning a mortgage limit of 2.5 x a man’s salary into 5x a dual couples salary. People bid up prices, forcing more couples to have two salaries to compete. And companies don’t have to increase salary to compensate … people combine salaries and go deeper into debt. Hell if you only had one policy weapon, forcing 2.5 borrowing against one highest paid persons salary is not a bad one. You won’t get re-elected however.
Countries like Indonesia have banned foreigners from owning land altogether. You can apparently still own property through land-lease agreements and other arrangements, but not the land. I think they've cracked down on illegal rentals too.
Real estate prices are out of whack everywhere. Even in places with no good jobs, low population density, and rapid depopulation, real estate prices are increasing exponentially. There are no market forces in play anymore.