“But there are no easy solutions” I’m sorry what? Dude remigrate all foreign competition and the demand will crater back to more manageable levels But I guess it’s better to end l!fe with nothing to your name than to be called a bad guy from WWII Gj! You’re a good goy❤
Capitalism is the best economic system. Even though Japan's population decreases by 800 thousand every year, housing prices in Tokyo continue to rise. Especially in Seoul, South Korea. Capitalism is the best
Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.
I advise you to invest in stocks to balance out your real estate, Even the worst recessions offer wonderful buying opportunities in the markets if you're cautious. Volatility can also result in excellent short-term buy and sell opportunities. This is not financial advice, but buy now because cash is definitely not king right now!
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
When ‘Sharon Marissa Wolfe’ is trading, there's no nonsense and no excuses. She wins the trade and you win. Take the loss, I promise she'll take one with you.
It's interesting for this discussion to mention Eastern Europe. Here, immigration is not significant, yet we see the same unaffordability in major cities. An explanation in Hungary for example is urbanization. In the 2000's, countryside houses were cheaper and city houses were more expensive. Now in 2024, city houses are incredibly expensive and village houses are incredibly cheap. What changed is that everyone wants to move to the big city. Many of my friends who decided to stay in the capital have 0 savings, and those who could move to the countryside are already homeowners starting a family.
Adding an example from Poland (which also has a recent surge in migration but the dire state of housing market is older than that): estate investment. The surging prices of the houses meant that buying as many as possible (even with mortgages) and renting them out (often to pay said mortgages) was a sure-fire way to allocate your funds and make a good buck in a couple of years. House flipping (buying old apartments for pennies, renovating them for cheap and selling quickly for a profit, rinse and repeat) became a full disaster in Poland too. In the last couple of years there are also huge investment/hedge funds buying whole housing complexes as investments, buying individual buyers out of the market. There is not enough housing already, and then there is speculation and corporation greed added to the mix. The government's response for years has been subsidizing mortgages (which does nothing on the supply side and inflates the costs of housing, making only banks happy in the end).
I can confirm that in Lithuania things are the same - no one want's to live in a vilage, everyone wants to live where jobs are - bigger the city, more stuff to do. no savings tho..
One factor that I would have liked you address is internal migration, or the fact that people are moving to the cities from rural areas. It seems like the housing crisis isn't nearly as bad in the countryside, it's just that it doesn't make sense for many people to live there anymore, as more and more people work office jobs
I honestly think it depends ik the country. Here in Flanders, Belgium, housing has gotten unafordable everywhere. In my rural city, it's bad, but in cities it's worse.
That assumption is outdated by at least one century. That's the other way around now, people are leaving cities for rural areas, making housing unaffordable even there.
@@mrsupremegascon Both are true. And IMHO compounded by the fact that the cities of the 1970s and 1990s are the same cities of the 2010s. If population grows, the number of cities should grow as well, rather than trying to expand only what already exists.
@@NunoLima1337 But except for France and UK (mostly due to immigration) European population barely grew between 1990 and 2010. Some countries even shrunk.
Here's the thing - even in countries with much lower immigration, housing prices have skyrocketed. This is because the supply of potential housing has a constraint - you can only build so many within a reasonable distance to the city center. Meanwhile, yes, demand has skyrocketed due to multiple reasons including immigration, short term rentals etc., but mainly because the stupendous amount of capital flowing into the market from market players that view housing as an investment rather than a home. There is a fix for this, but the issue is it is easy to find loopholes in it: limit the number of houses that one can own as an investment vehicle. You can bet your ass that you'll see house prices drop rapidly.
@@kenkrak4649 blaming property being an investment as the cause of housing shortages is absurd and shows you don’t know anything about it this or you don’t want to admit the cause of this crisis. It cannot possible be because your grandparents want extra cash to retire on. It’s cause you’ve artificially increased populations by several millions over a short period of time. This is as simple as it gets.
@@kordellswoffer1520 There are many-many other countries that didn't go through the same levels of immigration as Germany, France and others and housing prices are still skyrocketing there. Take Budapest in Hungary or Tallinn in Estonia as an example - these cities saw saw some of the highest rates of housing price growth in the past decade and it would be hard to argue that they've had high levels of immigration. Immigration is is one of the causes, yes, and it has many other negative effects, but when we're looking exclusively at the question 'why are housing prices so damn high?' the main root cause is the large amounts of investments flowing into the space.
There's entire streets in the city centre of Amsterdam that remain uninhabited and dark throughout the year because the people who bought that property used it as an investment rather than a place of residence. On top of hoarding precious resources they're also ruining the cityscape. Cities like Amsterdam truly shine at night when the window lights are reflected in the waters of the canals. Tough luck on that when those million dollar properties are empty.
@@bart7309 "Entire streets" was more of a hyperbole exclaimed in frustration and I'm by no means an expert. But I do know that locals who've lived in Amsterdam their entire lives have noticed that De Grachtengordel has become significantly darker over the years. It's a set of streets (Prinsengracht, Herengracht, Keizersgracht) that flank the U-shaped canals of the centre. The houses there sell for millions, which is particularly crazy if you consider how relatively small they are.
Let me introduce you to Georgism, aka tax the land the building is bulit on, not the building itself. The more valuable the land the higher the tax, so developers build as much dwellings as they can according to the building codes. If they don’t utilize the building then the land may increase in value but so does the tax, in addition investment property or large mansions become practically giant sinkholes of money for the rich. Check out BritMonkey’s more recent video about it if you have the time, otherwise I recommend the older one.
Less than 1% of homes in NL are unoccupied. You can’t look at a few streets with the nation’s most expensive real estate and extrapolate that this is a major issue. These areas are too expensive for most people to live anyways.
I'm in the south of europe and know multiple people in my family who own empty apartments for vacation or as investments, meanwhile my friends and myself struggle to find anything remotely affordable. There are digital nomads here but not that many. I met a couple of lawyers who owned an entire building and charged exhorbitant prices for studios. Yeah I'm not sure about the immigration theory.
The way I see it, citizens of a wealthy country have a right to demand higher living standards, immigrants have a right to seek a better life for themselves. It's poor planning and government policy that sometimes makes those things mutually exclusive.
Honestly I think the problem with how so many people tackle the problem is that they frame it as "Immigrants taking up houses", which implies that immigrants (on the whole) are less deserving of houses than domestics. It puts the burden of a failing system and supply shortage on people who have the same general wants and needs as everyone else. Not to mention it's dehumanizing - it's why the alt-right gravitate to this narrative, since they already *do* believe immigration is a problem.
@@BaneofBalor They have a right to seek happiness, but there is no right to seek it in Europe. If you wanna have a comfy life you can build it at home, just like Europeans did. Immigrating to Europe is NOT a human right.
that's clearly one of the sub-problems, the issue with you pinning the whole problem on this is that that's always been the case, it's not something new, go back a thousand years and it's the same, perhaps without the incredible bubble that keeps the markets afloat
True. But its not only rich people, its middle class, especially upper middle class too. People use it as a way of retirement saving or a way to store money in general.
Housing is an investment because of demand, it's not the other way around. If supply is high enough, the housing market crashes. In fact, look into cities with no demand (crashing populations), there you can find cheap living. In Italy you can get literally free homes in places nobody really lives anymore. Artificially deflating the supply by holding back real estate is something that exists and needs to be combatted of course, but it's a tiny factor in the greater equation.
Houses have become investment assets. When a hedge fund comes into your city, buys up 1000 new apartments on the spot, well... good luck being a young family, looking for their new home. And more and more real-estate developers are building `investment` apartments which are minuscule in size, 20-25m2. Corporations should not be allowed to own any real estate (apartments/ houses). There should be a limit, on how many apartments/houses a person can own un-taxed. Above that limit property tax calculated on value of said property should rise exponentially.
@@lluchmartinez3586 dont even know why he pushed the immigrant issue since yes they are a factor removing that factor wont solve the issue in 10 plus years
@@hyperion3135those companies are not building to reach the market. Often we see flats to buy getting build instead of focusing on rentals Now they can't sell them.
There is a major issue with the immigrants theory. The housing costs have skyrocketed even in eastern european countries which have until the war in Ukraine accepted basically no immigrants. The main reason behind the rise of the housing prices is imo demographics and the era of the 2010's with extremely low interest rates. Mortgage interest rates used to be lower than inflation and you could thus even earn money by taking a mortgage. Because of that housing began to be seen as a great investment both by individuals and by companies. This started the price hike which made the investments seem even better because the property prices sometimes even doubled within 10 years. The european governments need to put regulations in place so that housing is once again used and bought primary for living and not for investments.
The EU population has increased 1.4% total in the last 12 years, hardly a tsunami. In the Netherlands we have statistically more living space than ever before. The problem is, boomers have huge untaxed houses in cities, and the youth have none, and the countryside is emptying out. Allow urban densification and tax unnecessarily large houses.
The problem is that you get a house to raise a family, and once the kids are out a smaller replacement would be more expensive than what you currently own. So you loose an enormous amount of equity for nothing. You can't expect people to trade down for strangers, that's delusional.
So more taxes and more concrete is the solution. Blanket population growth hides the truth about the issue. Britain has seen an unprecedented influx of ten million people and their children into Britain over the span of a couple decades. No the issue isn’t your elderly grandfather or low house building rates. You disconnected buffoon.
@MorderkaiEdelblattsteinmeyerno they aren’t. Rurals aren’t driving the housing crisis. The influx of millions of migrants into the London and Parisian zone is driving it.
The problem is that you cannot simply look at the EU as a whole. In certain countries (e.g. Germany), the increase in the population has been much steeper. And you should not forget that we're speaking of millions of people without the means to buy or rent a home, and not just a few thousands.
the housing crises (in Europe) is multifaceted. you have (among other smaller reasons): - people/investors buying available "stock" as an investment and trying to get as much profit as possible out of it. and sometimes it's even done by letting a percentage of your stock sitting empty to drive up the prices of the stock you do rent out. (or sell). because less demand means higher prices. - not enough new houses being build to keep up with the population growth. this could be because of government rules/policy, climate change, or investors/people not building the required amount on purpose to have prices go higher and higher. - and of course the more people your take in form other countries, the more demand for housing there will be. and if you're already behind on the supply of housing, that extra demand is only going to make the shortage bigger. - not enough houses being build because building produces greenhouse gasses, and some countries f'ed up and made their climate goals so strict that everything else comes second to those goals. a few things that could be done are: - having a law that requires houses to be lived in. so no houses sit empty, just to drive up the prices. - putting a cap on immigration that is linked to the supply of housing. as long as there isn't enough supply, pause immigration (except for the few people that you really need to fill jobs like doctors). and when you're back to enough houses for the current amount of citizens, only allow as much immigration as the surplus of houses that are build each year. this way there won't be a future shortage. - declaring a national emergency, to make building more housing easier and a priority for the government. the big problem (like with everything) is that these things will hurt the people with money and the people in positions in power. and we all know that top often these people are able to make governments do their bidding, over the backs of the "normal" people.
Maybe a land value tax could be interesting to reduce vacant houses, speculation on the housing market, and in general landowners profiting off the young & poor. Also, making it easier to build from a regulatory POV definitely seems necessary: NIMBY-ism definitely isn't exclusive to the US/UK.
At Tobias: ideally there should be a land value tax *instead* of a property tax, but that can get complicated. Continental Europe also seems to have less of the problem we have here in the US (Canada has it too, so I'm told) of tons of places being zoned exclusively for single-family housing (and single-use residential so you can't just walk anywhere)
@@ivanshershnev9531 It's not enough: in expensive cities a lot of luxury apartments get built and sold solely as investment vehicles, no one lives there.
Really good video. A problem with the argument in Portugal is that you constructed much of your argument in relation with low paid immigrants but digital nomads are quite the opposite. While also taking up offer of housing they take it at a higher market value segment
Ah yes, I see your point, Initially I had a split segment on the impact of high skilled immigration, but it is a much smaller phenomenon. The Portugal reference fit in that logic, and probably should have been left out! Cheers, Hugo
Low paid immigrants are as big of a problem as wealthier ones. The rich ones directly pay more, but the poor ones are used to living under very bad conditions and want to save as much money as possible. So they go on to rent rooms or even beds, so a 3 bedroom that went for 600 starts to be rented for 300 per room, then some dont want to pay that so the landlord turns it into double rooms and starts charging 200 per bed. So in the end it makes the price of the rental double to 1200
Well, that’s what I thought to until others in different countries taught me about “gentrification”. And then it really opened my eyes to the commenter’s concern, as in reality, it was a lot more common than I thought. As suggestion, perhaps look into the concept, maybe even making a video? A lot of people could benefit from seeing the problem in different ways. :)
Housing prices have exploded in big cities, where high-tech jobs have provided way higher wages than what you will find in smaller cities. The solution would be either moving economic opportunities to more regions, encouraging 100% remote jobs, redevelopment of smaller citites into "dormitory citites" for bigger ones, and huge investments into public infrastructure.
I appreciate your insights on this topic. You did a very good job explaining the most sensitive aspects of the topic in a respectful but honest manner. We need more content like this these days
I think there is one more reason you overlooked contributing to the crisis. That would be companies buying off many apartments in major cities as an investment to rent them out.
So one company bought one house on the market from someone who wanted to sell it anyway... I mean, the supply didn't change while the demand is increasing. If more people are entering the market and the supply stays the same, prices will go nowhere but up. You either allow skycrappers (which also have its issues) or you build more houses
@@HaimRich94 Yes, it was sold by someone that wanted to sell it. But it was not sold to a person that needed the house, but rather wanted an investment. This investment isn't for the person that needs just the house/apartment/flat, but for someone that wants to make money by keeping the property, but not allowing young to own it. Or buy it to rent it on temporary basis(AIRBNB and so on). Boomers had it easy as they just dealt with the state and could(quite often) buy the property cheaply afterwards. This option isn't available for the young. They pay someone's else property - someone that is already much richer. Now, we are getting into the stage when people are noticing it and are very aware this is happening and won't be able to have a good life at the end - they will have to pay for basics until they move on to afterlife. His comment is correct, unfortunately.
@@nothereandthereanywhere "His comment is correct, unfortunately." No, it is not and I'm more than happy to explain you why as long as we are ok with a respectful debate. Let's go one by one "But it was not sold to a person that needed the house, but rather wanted an investment" If it was bought to someone who wanted the investment... What makes you believe that it wasn't an investment in the first place? or that it hasn't been a renting investment for decades and decades? The fact that they can buy it is because someone else didn't want that investment anymore (a house bought by a family to live there, is still an investment into equity). "This investment isn't for the person that needs just the house/apartment/flat, but for someone that wants to make money by keeping the property, but not allowing young to own it. Or buy it to rent it on temporary basis(AIRBNB and so on)." Let's start by the end, if someone puts it on AirBNB is because there is demand for that because otherwise people wouldn't do it... Do you want to avoid that? Easy, build more hotels and if businesses are not willing to build more hotels then is because something made by the gov made it cheaper and easier to have AirBNBs than hotels (I mean, ;D maybe the job market is not attractive there?) Now talking about owning it, ask the gov to allow more buildings (and higher buildings) so there is more supply so the young can own it. You know who is the first person that will tell you we don't need to make more houses nor allow more AirBNBs? The one who already own them and has AirBNBs ;) "Boomers had it easy as they just dealt with the state and could(quite often) buy the property cheaply afterwards. This option isn't available for the young. They pay someone's else property - someone that is already much richer. " Nah it wasn't that easy as people like to say, today people buy with less than 5% (and a lot of people had locked sub 2% rates) interest rates while boomer paid up to +10%, their benefit was that there was a lot of supply to buy from so prices weren't that high. Now, let's talk about the first comment: "That would be companies buying off many apartments in major cities as an investment to rent them out." This will vary depending on the market, but for example in the US a lot of people blame institutional investors for owning too many single family homes... but that's a myth, the fact is that they own a really small amount compared to the whole market, according to John Burns Real Estate Consulting is less than 1% (but let's say is actually 100% more, so they should own something like 2% of the supply). The hard truth is: You either kill a bunch of people like during wars or build more houses because if population continue increasing and the supply stays the same, the prices will increase at (more likely faster) the same rate.
@@Vektab mostly those places are rented out for short stays, like AirBnB. because you're able to ask more for those stays than if you rent them out to a family that needs a place to raise there kids in. so housing that should be used to house citizens, is used to house tourists. so the supply might stay the same (on paper), but the people that used to live in those houses get priced out and can't afford it anymore. or even aren't able to rent those houses anymore, because they aren't the "desired" clientele
I think that the biggest reason for housing shortages (at least in the UK) is strict zoning laws which prevent housing being built in areas where it needs it. For example, green belts around many cities restrict growth and since there aren’t any empty plots of land that means that buildings needs to be tall which in turn often prompt community backlash. In my opinion, most green belts shouldn’t even exist since it’s mostly private land anyway and in most cases doesn’t contribute much to environmental protection.
Being from the US, I agree. It's a tad slobbering to see that continental Europe also has a housing shortage because they actually have the mixed-use zoning laws we seek. He makes a compelling case that people just stopped building during the demographic decline. In other words, the problem is multi-faceted and so will be the solution.
Environmental protection is generally not the argument for green belts (and if it is, it is generally pretty weak as you say), it's food security and preserving rural character (which in the UK is something of big cultural importance). Personally I think the UK has a problem with overconcentration of the economy in the south east, which puts a lot of pressure on London and surrounding areas and greatly exacerbates the housing issue. It would be a lot easier to deal with if we didn't have to keep building homes in areas that have already nearly been completely filled up.
@@Croz89 I’m all for preserving character but much of the green belt is just fields and it already borders cities. The UK has a lot of farmland so taking away Greenberg’s wouldn’t make much of an impact. There was a study which showed that reducing the size of green belts by just 10% would allow for the construction 7 million homes. I’ll put a link to a video which talks about it as well as other issues related to housing. Edit: I found the link. He talks about green belts at the 22:15 mark ruclips.net/video/b5aJ-57_YsQ/видео.htmlfeature=shared
@@TheLiamster Not all greenbelt is created equal mind you. Some is more agriculturally productive than others, and a lot of that is in the south east. And really anything which increases UK food imports even a little is not going to be popular. Agriculture is seen as a very important industry which is already struggling. I have watched some of that video, including the portion on housing, and it's an interesting if quite radical position to take. I do think he is boiling down a complex issue and only considering one simple solution. As I said in my comment I think a lot of the problem is caused by regional inequality and the absolute economic dominance of the south east. There are other parts of the UK which could support a lot more people (some are basically post industrial wastelands) with minimal impact on prime farmland, if only the economy was less London centric.
The best solution would be to establish new cities by combining existing ones and grow them into one big city and make high speed train connections. When everyone for example wants to live in Berlin, you need another Berlin. There is no general housing crisis, there is cheap housing everywhere except in the big cities.
I'd go further than that... I think that establishing brand new cities in underdeveloped areas of Europe would help a lot. Obstacles to new development such as Nimbys, cost of extending old railways, having to knock down old buildings, etc... all become less pressing issues if you start off in a "greenfield" project. It is definitely not the kind of project that private investors will be interested in, but state-sponsored large projects can be viable if we don't go megalomaniac like Saudi and other Arab countries. In both countries I've lived in (Portugal and United Kingdom) I think there would be a lot of great opportunities from developing a new capital city from the ground up like they did in Brazil and are working on in Indonesia and Egypt. For the rest of Europe, the brave choice would be to move Eastwards, rather than having the economic, finance and political centre too concentrated in the NW of Europe. Perhaps the European Parliament should meet in Bucharest, Krakow and other cities rather than just Brussels and Strasbourg.
The issue is that the private market has become so powerful that (up until recently) they could do whatever they want in countries like The Netherlands. There was not really an incentive for them to construct a lot of houses because a shortage of houses would increase the prices even more. Over the past few decades, private investors haven't added that many houses to the market as some may think. And due to new laws, owning and constructing properties becomes less attactive, so investors just simply stop funding many projects. It shows that they only care about the money (surprise surprise!), so that's why we shouldn't give them too much power. The private market simply failed, and many young people have to face the consequences of this mismanagement, partly caused by former Housing Minister Stef Blok, who got rid of the complete Ministry of Housing. Social housing corporations should build the fast majority of affordable housing for the lower/middle class again, like they did in the past.
Месяц назад+2
So there are laws that make investment in new construction unprofitable, and your reaction is that this means the private market has failed? And the solution is to give more power to the government? This type of idiocy is why Europe is in decline.
Private markets have definitely failed across the West. But why is the discussion always about private investors versus social housing (government owned). Isn’t there a middle ground where the government/a state run company could be fronting the investment money but then selling off the development to make a small profit. Somehow it seems that the private market isn’t interested in these profits but would rather invest in existing stock’s value continuing to grow.
I think you don't get the point I'm making. Even when it was very profitable, the private market didn't add many new houses to the market. Instead, they bought a lot of houses to "milk them out" as we call it here. Creating scarcity and pumping up prices. After the WW2, the government also took control over the housing market and constructed about a million social housing units all over the country, which solved a big part of the housing crisis back then. Investors can still make money with properties under the new regulations. There are fundings and benefits to support them, because we need them. But the profits they can make aren't as high as they were before. But in many cases, they can still make profit! Housing needs to remain affordable, however. The private market hasn't been able to offer this. Instead, the opposite happened.
The main reason the state can build "affordable housing" is that they often already own land - so that falls out of the equation making it "affordable". I just renovated a house and you would be absolutely shocked at how much it costs to buy and install a sink, or to get a few electrical lines in. Trust me. Building is painfully expensive. If you think cheap housing is possible you're delusional. I guarantee you it's not possible. Housing was never affordable. It's always been expensive. And esp in the big cities. And even more so for the standard people expect amd see as normal nowadays.
@@mysterioanonymous3206 No, there were times before when houses where affordable, even for the lower and middle class. There are always solutions to make things cheaper. I'm not saying the houses will be cheap.
One part of the solution could be what the UK started doing just a few months ago: sharply increase council tax (or taxes similar to that). In the UK landlords pay council tax which can vary widely, for example £500 a month, which pays for some public services in the area where the house is. Since April, empty homes in the UK pay a 100% council tax premium. In Cardiff in Wales it's a 300% premium. We have £50 billion worth of property sitting EMPTY just in London alone. They could make laws for properties to pay a 10,000% premium if they are sitting empty for 5+ years. Landlords are rich enough. Use the money raised through that for actually affordable housing. Also where I live many houses are empty and up for sale for years, yet we are crammed into houseshares where even on a decent salary you pay 30% of your net salary... for a room. Not a flat, just a room with thin walls where you can hear everything your housemates do. And still 1 hour away from your job.
I don't think this will make much difference anyways. Sure £50 billion may be a big number but then how many homes are we talking about? Considering big detached homes in London cost a few million pounds on average, you are talking about at most a few thousand homes which is like less than 0.1% of the total vacant homes in London. Are you going to liquidate those assets? Cos that's how this sort of wealth tax will only bring in more money to the economy. It won't make a difference to the housing crisis as £50 billion in the grand scheme of things is a drop in the ocean compared to total cost of houses that would needed to complete alleviate the supply issues that any Western country faces.
Taxing empty homes seems like a good idea and also justified, but how to enforce it? Regardless, I doubt it will raise enough money to fund social housing as these are a relatively small number of expensive properties concentrated in popular locations, such as London. The real problem is foreign ownership. Most of these empty homes are cash purchases by rich foreigners trying to avoid paying tax on their assets.
You forget building ground! So important. When wanting to build cheaper they always talk about cutting on quality or regulation. But that is a stupid way to go. When I make a house a less energy efficient I might save a bit of money but the owner/ tenant pays that 10 fold in the years after. Governments need to take control back on ground. It takes up such a big portion of a house price and it is all speculation! Also finances. House prices are so high because of financialization and investors benefit of scarcity . I totally miss these aspects in your video!
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People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
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I think the people here have it ass-backwards. The housing-crisis isn’t caused because people (be they individual landlords or cooperations) want to rent out apartments. That’s not the “investment” aspect of housing that’s screwing us over, it’s the asset-appreciation of housing itself. Whether you, someone else, or a big company owns your apartment should make no difference to the rent at the end since all three parties would have the same bargaining power (for the case of you owning the apartment, just change “rent owed” with “potential rent/opportunity cost”). The housing crisis is caused by a lack of units being built. And this is almost certainly because of zoning and this is more the fault of individual homeowners than big companies. Here’s why: if you only own one unit of housing and are unlikely to get another one, the main avenue you have to raise the value of your asset it to limit supply. If you’re a big company that can make more units, you’d like to add more supply because even if per unit price drops, the amount of units you can sell increases and so does total profit (even if average profits drop). Furthermore even if homeowners don’t want to cynically inflate their major/only asset, their incentives are such that they can just veto development at the slightest inconvenience (new construction blocks their view, new (poorer) neighbors, slightly more congestion/noise, etc). Most people don’t like to hear this, but this is the main reason home prices have become expensive, largely bc the majority of voters are homeowners and thus politicians are incentivized not to reduce home prices, hence why the vast majority of “housing measures” are rather ineffectual demand subsidizing measures (cheaper credit, housing vouchers, etc) which will just inflate home prices even more.
how hard is to make rental unprofitable ? if you own a property and is not the one on your ID, drown it in taxes so it becomes unprofitable to rent out. besides, investing in real things can spur gdp growth too
the lack of housing facilities is not the main issue. The problem is that many of them are empty and used exclusively for speculation by large concentrated groups. Best known examples could be the thousand of empty luxury buildings along the spanish coast. Immigration is not the main issue...
Housing seems like diamonds now it’s artificially high in cost due to it having become a speculation market, one would think demand = more building and thus fair prices but thats just not the case anymore. In my country after they stopped building social housing there was a speculative boom and prises rose rapidly. I think it’s fair to say the quickest fix is government intervention however it might not be the best fix. Also one thing that everybody seems to fail to mention is that young people today expect to be able to buy housing so early in life, like mid 20s to early thirties, before this was not the norm at least in my country. FOMO and all these pressures combined makes it a idiotic speculative bubble, i hope myself i can just find somewhere in a smaller place outside of town
I think one of the issues is that residential housing has become an investment asset in the last decades, and for a lot of people their houses are their only nest egg. Governments are indirectly forced to keep housing supply low to keep the older voters (which vote more) happy. If you open your borders for long term economic immigrants to easy a labour shortage problem, you must keep in mind that they will also need a place to live, and a spot at the local school for their kid to integrate into their host society, and some associated medical expenses. Not taking this into account when managing immigration is willful ignorance. I know some governments would love seeing immigrants arrive at 8am from their country country of origin, work all day, buy their groceries in the host country and take the national airline to fly back to their country of origin at 5pm. Unfortunately that's not realistic.
born in vienna, grew up, studied and working here. my salary is decently above average, especially for my age, and even with frugal saving and investing i will most likely not be able to afford raising a family here
Funny, because Vienna has the largest stock of publicly owned apartments anywhere in the world. Maybe you're just incompetent on your above average salary 😂
Not to forget a stagnation of the real estate prices would potentially lead to a huge economic crisis. Usually it’s not in interest of the governments to undergo a decline or a stabilizing of the housing prices.
Stagnation would probably be OK, a sustained fall would be disastrous. Millions would have underwater mortgages, therefore literally unable to afford to sell their home (plus being put on the worst interest rates). Governments would be under a lot of pressure to bail homeowners out by either paying the difference to the bank/building society or forcing them to take a haircut.
forbidding short-term rentals for tourists is such a stupid idea! It is literally limiting country or city tourist income. Get nimbies under control, build more and prevent property being bought by investors. Real estate has long been considered as a good investment option with home prices constantly growing. This should end! Make sure no one can from real estate speculation, and this will solve the problem!
Romania has less redtape when developing (this not all sunshine and rainbows but it makes owning your place more affordable). Both houses and apartment buildings get built to cover demand. There is some social housing (ANL) but that is a drop in the ocean and I think the renters have a path to ownership which they mostly take, also due to the culture of owning your own place. I bought my 100 m2 3 bedroom house for 115 k euros before the war in Ukraine, now it's probably 20-30% more expensive which is basically the inflation rate. Depends also on the region as bigger the city the higher the prices. Also everywhere in Europe you can find cheaper places in areas that are not so well off economically and I assume working remotely might help a lot o people to perhaps live in cheaper rural/small town region and mostly tele-coumute.
People saying "Look at Eastern Europe, prices went up and there is no immigration" are wrong. If it's anything like my city, there may not be big non-EU immigration, but I noticed much more German, French, Dutch, Belgian and other people in my city (basically in-EU migration), mainly older folks or digital nomads, who have ability to work or live in my city with no requirement to be fixed in their country of origin. 10-15 years ago you barely heard anything but local language, or at most German. Now in some parts of the city you barely hear language of my country and I'm not talking about tourists.
The probem with georgist LVT is that is supposed to be a high tax, so the social dynamic would end up that the average person would no longer be able to afford their home once they retire. sure they could resell and move somewhere cheaper, but that's not in line with what people mean when they say "owning a house"
I know the ASML story very well. I used to work there and even though the salaries are high, you end up paying a big part of it for an overpriced apartment. apart form that you also suffer other side effects of the company being overcrowded like absurdly long waiting times for parking, no office space or even toilets being constantly occupied. Of course remote work is not a possibility since the company is pretty much run by boomers. The conclusion is that it is better to simply work somewhere else so you can take more money home.
I live in the netherlands. When i bought my house in 2018 my parents warned me it was expensive at the moment. I said waiting makes it more expensive. I'm happy with my choice :3
I appreciate your perspective and very much have to say it is refreshing to see someone give answer that is inconclusive with the current data. I think a point you are missing in your analysis is the growing inequality between the middle class and the ultra rich. This is a large indicator of why asset prices (in this case real estate) is going up even though interest rates are growing. A wealth tax and an end to tax havens could solve the issues of government debt and help them fund more affordable housing as the market is more interested in luxury apartments in large cities than large housing complexes.
A problem that affects the housing market in Europe is the population moving from the country side to the City. In France for example, there is a surplus of housing in smaller rural villages that you can purchase for less than a 100k. Italy, famously offered the house for a Euro scheme. Back to France, some of the Migrants were refugees and are being housed in the rural districts like in the east. Doing manual jobs that the young Europeans do not desire. The same thing is happening in the US as well. So, much of the housing pressure is relocation within the country of rural to city.
@intoeurope Your follow-up video about 1 euro homes in Italy actually got me thinking about a solution... those villages are emptying because it is expensive to provide there infrastructure, services and opportunities which people need. So that's exactly the action: provide just enough infrastructure to make decentralised areas more liveable. Additionally, promote flexible working arrangements as much as possible as those allow to find opportunities not only in big cities but everywhere.
As an architect specialized in the real-estate market, what I can safely say is that the housing crisis’ single cause is the speculation behind real-estate and its rapid valuation over time. It is ridiculous sometimes, if you stop to think about it, how a wrecked 19th century apartment in the champs elisées can cost ten times more than a villa in rural Spain.
Its two different problems, the lack of housing is basically because its illegal to build a house or tear down an old one to build high rises. It is not because the lack of government built houses, the free market is able to provide every other type of good without government intervention, and same goes for housing.
Immigration and lack of new houses surely contributes, but you left out speculation and the long spell of very low interest rates that fueled the buy to let phenomena and generally that lot of people could "afford" to but houses driving prices up, until interests rates went up.
150k for an outdated house in the countryside when your salary is 20k (Southern EU) is madness. A decent house starts at 250k. If you go to a city this number doubles
an easy way to solve this housing issue could be to simply make illegal for retirees to live or own anything inside a city, force them to sell any city property they may have, and force them to moove to rural countryside. retirees don't need to be in cities, since they do not work anymore, hence, don't need to be in close proximity to jobs. and since jobs are mainly concentrated in urbanised area, it is only natural that living in a city should be a working-age-people thing. beside, this forced retiree exodus toward rural areas would have the effect of redynamising the countryside (as more inhabitants for the vacants unhabited housing in the countryside, and more people with a passive income (retirement pension) going there and spending their passive income into products.
There is another reason, vacation homes. I live in a small village and about 30% of houses are empty 90% of the year. Bought up by richer older folks as a vacation/second homes.
The price of new family houses has gone up not just because the reasons mentioned in the video, but also because the plots (land estate) has became much more expensive. The plot prices multiplied in couple of last years in Czechia. This reason should be examined in videos about home prices. I assume that the reason is the same as the rise of appartment prices: is the supply-demand dynamics. May be tightly related to the the fact that real estate is not just used as housing but also as investment, not only by rich people but also by the middle class, especially upper middle class. They use it to store money, either the money they inheroted or the money they want to safe for retirement.
Another point which was left out here is the change of the family structure More people are living alone and occupy more space Investing into housing or just owning more than one houses has become pretty popular for the rich (my neighbor, lol) Combine this with all of them moving to a few parts of the country while less developed and more rural regions are being emptied
It might be important to mention the market pressure on mediterranian areas for summer investment took away all year long livable places from locals and younger gen as well since real state has no interest over building afordable housing.
Sorry but you totally miss one point: internal migration. People are leaving the countryside and moving into the cities. And this pushes up the prices. In Hungary for example there are hardly any immigrants (2,5% of the population) and there is also a massive emmigration and still there is a massive housing crisis. Few weeks ago I read an article about this. The main causes are the regulatory hurdles (no, not the environmental regulations), the increase of the building material costs and labor shortages. I assume, other eastern european countries have the same problem and not the immigration from outside. In Germany for example is the situation similar. People not just moved from the contryside to the affluent cities, like Frankfurt a.M. and Munich (Minga:)) but from the former eastern Germany states to the western Germany states. The total number of the population has grown insificantly in last 50 years. In 1974 it was 79M now 84M. It is a 6% increase. If there would be a cut in the immigration, the construction industry would collapse. The problem here in Germany is also the burocracy, building material cost increases and labor shortages. I wish people would give up blaming immigration for housing shortages. Europe needs immigration, there is a massive labor shortage and the fertility rate is 1,46 in the EU. We are getting older and there is less and less taxpayers to maintain the welfare state. In my opinion the solution would be to incentivise people to move to the "cheaper" places. and to build more (private and publicly owned) homes.
Just adopt Freedom to Build Housing Policies & Zoning Regulations from Japan. It will make it much easier for supply to catch up with demand. You can even put stipulations to keep the same decor/style so the culture isn't watered down or lost.
Allow the construction of residential areas made of containers, BUT just as a temporary measure, like 5/10 years, they are chep in the 10.000€ ~24sqm (I can do it in that price), quick to market (2 months), and this will provide lots of habitational solutions to people in need, even we can find an architect/designer who can create 6/8 story container buildings with grace and style and make those attractive to the people and the eye, And as a temporary measuse, the city hall can provide rent access to public soil to build such buildings. every 5/10 years the need for such solution should be reviewered as the tenants must know that they can not live there for ever, just a 5/10 year period contract, the time to find a more permanent solution.
I see as well the influence of the COVID into the housing prices. At first the pandemic caused landlords to sell their properties, therefore these houses aren't available anymore for the market after the sell. And with the cost of materials and the European burocracy no new houses were built fast enough, causing a pressure on the prices... Take a look on United States, they had this problem and now with the rise of interest rates + a lot of new construction the housing prices stopped rising. They still have the housing prices high, but it's getting better when compared to Europe.
There's 3 main reasons for this increase. 1- the one from this video is population increase due to migration. Which is fair... We've been, for a long while, using migration to compensate for the lower birth rates in order to increase our economies productivity but that doesn't explain how so many houses left the market suddenly since... As stated... Migrants CANNOT usually afford housing and this is a problem that started in the US AND EUROPE AT THE SAME TIME. Unless migrations have increased exponentially that is NOT the main driver, at least not alone. 2- (which is touched briefly) housing distribution. while there's still more houses than people (Portugal has 3 houses per inhabitant even with migrants) those are not distributed uniformly and major cities have still grown massively (immigration, company centralization, both the economic crisis and covid making low to mid end jobs scarcer...). People who bought houses very rarely sell or rent because they were bought to be used as second housing for when they go to work while their family house is further away from their jobs and even as they get older they now tend to move between the 2 as they need more frequent medical attention which doesn't exist in the rural areas. 3-the current run to investment. Everyone and their mother is now an "expert" on the market and everyone is after that sweet, sweet "passive income". Investment companies have multiplied like mushrooms and there's a lot of people with around 1million €/$ due to the increased demand for programmers and the bonkers growth of tech companies. Young people are also more likely to own investment options and have more access to money to invest. While larger investment companies are followed closely and try to not make their investments lean too much on the housing market since the last market crash, those new investment companies simply decrease the risk of their investment options by... Buying property... And since most property taxes are paid annually they can simply buy housing, wait 6 months, sell that housing and since everyone is doing it in large amounts this creates effectively artificial scarcity and thus they profit without having to pay the major taxes, getting constant returns with minimum investment (you can see this in Portugal were the money collected from the IMT tax has surpassed the values from IMI tax, IMT being a ~1% tax paid on buying a house while the IMI is the anual property tax, which means there's FAR more houses switching hands than property itself). Adding to this banks had a lot of property on hand since the last crisis which made them a very cheap as an investment source. And since housing needs are more or less inelastic (while migration increased, total population stays more or less the same, which is why we need and how we manage migration in the first place, this makes housing needs pretty much the same every year). This extra demand for housing to use as investment unbalanced the offer/demand scale increasing the price of housing and placing extra burden on the rent market. There's other minor reasons like the decrease in public or social housing (as mentioned in the video), or the covid epidemic giving people some extra economic leeway due to government support and increasing birth rates which lead younger people to consider buying their own home but the housing market had been staying pretty much stable for a long time and this sudden change cannot be simply explained away by "immigration". As a note... NONE of these reasons are bad by themselves. The problem is the market was basically balanced on the edge of a knife since the last market crisis (which WAS a housing crisis make no mistake...) and banks had too much property on their hands they wanted to get rid of.
This will never stop as long as residential housing remains a good investment. Subsidising first time buyers doesn't resolve the problem with supply, it only increases the prices for future buyers. Social housing just might relieve the pressure.
Another important point is age and the state of our social contract - which is in a very bad state. If I take my great grand parents as an example, they all were born around 1900 or 1905. Nearly all of them - and most other people in that generation I happened to knew - lived in their own house until their very end. And all who lived in their own house did so with their own children who cared for their mother and/or father. Up until the generation of my parents - boomers - that was the social contract in my area: Parents build a house, get a couple of children and one of those children then has to take care of the parents when they grow old and in return gets to live in that house for free and later would inherit the house. Around the 80s and 90s, that changed and all of my grandparents - who all took care for their own elderly generation at their time - are now in care facilities, because none of their children was willing to take care of them. Instead, their houses got sold off and now my parent generation all live in small appartments for rent and lament about high rent costs. And no, job opportunities or urbanization weren't realy that important in that situation - my grandfather for example never found a real job, but still had a good life in the countryside, because he never had to buy fruits or vegetables, since he could grow them himself. His daughter sold off the home, when she was unemployed and moved into a city - still unemployed. Why? Because gardening wasn't her thing. YES, Europe did a lot in the 50s and 60s to comfort the boomers, houses were built, but also schools or universities. And boomers haven't realy taken care for all what has been done for them. As I said, when my great grandparents and grandparents retired, their life started to rotate around things like caring for the grandkids or working in the garden, reading, making music, cooking for their children, who lived with them in the same house, washing, drying and ironing their clothes, tutoring the grandkids after school or doing stuff for the church or other NGOs. My mum retired just a year ago and since then has already been on four vacations. She could have saved up some money to buy a house where I can live with her and take care of her and which I later could inherit and at some point pass on to my own children - but in her eyes, it's my job to buy a house and then offer her to live with me until the end of her days. Our social contract is broken.
you're report is primarily based for countries that have population growth, what do you think it will happend to countries that don't like eastern europe
There are very easy solutions to increase the supply and availability of apartments. Simply, invest more money into infrastructure (e.g. local trains/trams) so there will be more space for investment. Reduction of regulations would also help. I cant understand why the governments don’t do it? Any action taken should focus on increase of supply.
in ireland the goverment sold 2 thirds of our social housing plus we have vulture funds who buy up entire estates before any normal person can purchase on top of that the mrtage system is broken paying off a mortage on a average house was 500 per month yet today people paying up too 2 grand on rent cant get a mortage its broken
Regarding labor shortage, it feels like too few people educate themselves to take blue collar jobs. In my country we have an over supply of media and communications majors for example.
Well, in Holland the only increase in population comes from immigration, which has been quite sudden in the past few years. So it can directly related to a lack of housing, which also has been quite sudden. Also, much social housing was poorly built and has already been demolished after 50 odd years. And what is being built lately has mostly been bigger, expensive houses for sale on the market, many of which are being bought up by investors whom, in turn, rent it out at astronomical rates. Also, more people are buying 2nd and 3rd houses and rent them out e.g. via airbnb.
In Germany there is currently little political acceptance of the notion that immigration can or should be regulated through the lense of economic benefits - something that has been common sense for decades elsewhere. This has exascerbated many issues and the question of housing specifically - the latter being primarily an economic matter in the end of the day. Even worse, there seems to be no realization among the country's current leadership that the way things are going now can easily lead to large backlash with rightwing parties coming into power in growing parts of the country, something that the polls are in fact already indicating. Given the country's history, there is a huge ongoing discussion in politics as to how to best fight these parties. However, there seems to be no acceptance of the idea that a real change in policies is needed.
It's not only an issue of wealthy EU countries, the same issue happens in countries around EU average or less, like living costs rising around big cities (then around towns around big cities). In my country about 8 issues are being mentioned. First it was state or city owned states being sold for cheap in the 1990s for various reasons, now they push for new ones being built. Cooperative housing used to be a thing, now it's rare and not that well supported in my country. Gen X baby boomers wanted to invest into something solid and with cheap mortgages many people did, local, foreigners, physical or not (companies, funds). Also one minor factor are citizens of wealthy EU countries not only investing, but actually moving here. Comparing London or Paris with Prague is like comparing Los Angeles or San Francisco with Boston or Raleigh in this matter, but the issue exists.
Another option is to facilitate renovating and tearing down unusable properties. Its surprising how in many cities with housing crisis you see tons of abandoned houses and even buildings that are not been used, well they are used but by criminals. Even in rich countries like Ireland you see that.
It is also a matter of ageing people and space: there are many more single people or smaller families but the type of offer doesn't match the type of demand; baby boomers still live in oversized properties for their family nucleus.
I have a Car. My neighbor has 10 Cars, he mostly uses 2 and the rest keep a permanent parking spot on the street... Sure he "pay taxes" on all of them, so the goverment could build more parking... but there is no space in my street, I gotta park 2 blocks from my house.
Can't understand how the end of the issuance of new golsen visas in Portugal would lead to existing digital nomads to leave. Our government really is shit, so I wouldn't be surprised if it did somehow
i am an immigrant but i am also an economics PhD and even though it sounds wrong european countries will go into debt if they give social housing to immigrant. I lived in denmark and every year i go back, I find my friends struggling. You have to understand that if immigrants don't respect the heritage of their country and give to economic growth the original population will suffer in incoming years. Their culture is laid back and liberal and most immigrants don't change much. My parents never tried to integrate with locals and I don't thin most people do. Only a fraction of people give positively. My fellow immigrants friends are still working minimum wage jobs but they have gotten married (to another home country) and have multiple children they can't support. Goverment need to follow what qatar, UAE does. They are sort of like EU to citizens and USA to all foreign nationals which has contributed positively to their economy. I understand plight of both, but finances don't work with altruism.
They build new homes, but they do it for higher classes. Governments need to build more affordable housing, like how they used to or give some major tax break so building lower income house can turn into a profit.
Social housing and crack down on loopholes for corporations that own many real estate properties. Also, increase taxes on people who own more than one property. Stop treating property like an investment and more as objects for living for people.
Unaffordable, undesirable, low quality housing is a big issue in Canada and the US atm as well. I just want the whole system to crumble at this point. They are building cheap low quality hosuing all around me. But the prices are unaffordable for the average wage in my state. I live in one of the top 10 moved too states in the country and I just dont get it. We dont have good jobs or good housing. My mother bought a town house in the 90s for 40k usd making less than 15 buck a hour. All by herself. New townhomes are 200k and I only make 15 as a electrician. A actual house is 300k and up and of course low quality materials, tiny yards, not much parkign space, and cookie cutter dystopian looks. Its completely flawed.
let's ignore that in the 60s and 70s there were not huge immigrant waves from Greece, Italy or Turkey into Germany or the Netherlands among other countries.
And lets hide the fact that the entire second part of the video is about the fact that construction stopped in the 1990s after the baby boomer generation came of age. Cheers, Hugo
This video alone would deserve a research grant. For commenters: if you have a pet theory, then make a well-researched video, like this one. Don't base yourself on some anecdote that fits your narrative.
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“But there are no easy solutions”
I’m sorry what? Dude remigrate all foreign competition and the demand will crater back to more manageable levels
But I guess it’s better to end l!fe with nothing to your name than to be called a bad guy from WWII
Gj! You’re a good goy❤
You can buy one in Moldova for 20k euros, 60k in most Balkan countries. Or a 17m2 cell in Munich for 300k
Capitalism is the best economic system. Even though Japan's population decreases by 800 thousand every year, housing prices in Tokyo continue to rise.
Especially in Seoul, South Korea. Capitalism is the best
What is more ugly than a social housing Like the comibloc . It was homelessness
Second houses and short term rentals are a problem for 10 years now. I think this is where we can lessen the probem most.
Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.
I advise you to invest in stocks to balance out your real estate, Even the worst recessions offer wonderful buying opportunities in the markets if you're cautious. Volatility can also result in excellent short-term buy and sell opportunities. This is not financial advice, but buy now because cash is definitely not king right now!
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
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She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
It's interesting for this discussion to mention Eastern Europe.
Here, immigration is not significant, yet we see the same unaffordability in major cities. An explanation in Hungary for example is urbanization. In the 2000's, countryside houses were cheaper and city houses were more expensive. Now in 2024, city houses are incredibly expensive and village houses are incredibly cheap. What changed is that everyone wants to move to the big city.
Many of my friends who decided to stay in the capital have 0 savings, and those who could move to the countryside are already homeowners starting a family.
The two major problems facing Hungary - urbanization and orbanization.
Adding an example from Poland (which also has a recent surge in migration but the dire state of housing market is older than that): estate investment.
The surging prices of the houses meant that buying as many as possible (even with mortgages) and renting them out (often to pay said mortgages) was a sure-fire way to allocate your funds and make a good buck in a couple of years.
House flipping (buying old apartments for pennies, renovating them for cheap and selling quickly for a profit, rinse and repeat) became a full disaster in Poland too.
In the last couple of years there are also huge investment/hedge funds buying whole housing complexes as investments, buying individual buyers out of the market.
There is not enough housing already, and then there is speculation and corporation greed added to the mix.
The government's response for years has been subsidizing mortgages (which does nothing on the supply side and inflates the costs of housing, making only banks happy in the end).
I can confirm that in Lithuania things are the same - no one want's to live in a vilage, everyone wants to live where jobs are - bigger the city, more stuff to do. no savings tho..
Because there still is migration. In this case from rural areas and towns into the cities but still migration nonetheless
@@berlineczkawhere are the migrants in poland from?
One factor that I would have liked you address is internal migration, or the fact that people are moving to the cities from rural areas. It seems like the housing crisis isn't nearly as bad in the countryside, it's just that it doesn't make sense for many people to live there anymore, as more and more people work office jobs
Indeed it just sounds like let's blame the immigrants for views, a very lazy video
I honestly think it depends ik the country. Here in Flanders, Belgium, housing has gotten unafordable everywhere. In my rural city, it's bad, but in cities it's worse.
That assumption is outdated by at least one century.
That's the other way around now, people are leaving cities for rural areas, making housing unaffordable even there.
@@mrsupremegascon Both are true. And IMHO compounded by the fact that the cities of the 1970s and 1990s are the same cities of the 2010s. If population grows, the number of cities should grow as well, rather than trying to expand only what already exists.
@@NunoLima1337 But except for France and UK (mostly due to immigration) European population barely grew between 1990 and 2010.
Some countries even shrunk.
Here's the thing - even in countries with much lower immigration, housing prices have skyrocketed. This is because the supply of potential housing has a constraint - you can only build so many within a reasonable distance to the city center. Meanwhile, yes, demand has skyrocketed due to multiple reasons including immigration, short term rentals etc., but mainly because the stupendous amount of capital flowing into the market from market players that view housing as an investment rather than a home. There is a fix for this, but the issue is it is easy to find loopholes in it: limit the number of houses that one can own as an investment vehicle. You can bet your ass that you'll see house prices drop rapidly.
You people haven’t a clue.
@@kordellswoffer1520 Enlighten me then.
@@kenkrak4649 blaming property being an investment as the cause of housing shortages is absurd and shows you don’t know anything about it this or you don’t want to admit the cause of this crisis. It cannot possible be because your grandparents want extra cash to retire on. It’s cause you’ve artificially increased populations by several millions over a short period of time. This is as simple as it gets.
Exactly 👍🏼
@@kordellswoffer1520 There are many-many other countries that didn't go through the same levels of immigration as Germany, France and others and housing prices are still skyrocketing there. Take Budapest in Hungary or Tallinn in Estonia as an example - these cities saw saw some of the highest rates of housing price growth in the past decade and it would be hard to argue that they've had high levels of immigration.
Immigration is is one of the causes, yes, and it has many other negative effects, but when we're looking exclusively at the question 'why are housing prices so damn high?' the main root cause is the large amounts of investments flowing into the space.
There's entire streets in the city centre of Amsterdam that remain uninhabited and dark throughout the year because the people who bought that property used it as an investment rather than a place of residence. On top of hoarding precious resources they're also ruining the cityscape. Cities like Amsterdam truly shine at night when the window lights are reflected in the waters of the canals. Tough luck on that when those million dollar properties are empty.
May I ask you which streets you are referring to?
Just curious, I do not disagree with you.
@@bart7309 "Entire streets" was more of a hyperbole exclaimed in frustration and I'm by no means an expert. But I do know that locals who've lived in Amsterdam their entire lives have noticed that De Grachtengordel has become significantly darker over the years. It's a set of streets (Prinsengracht, Herengracht, Keizersgracht) that flank the U-shaped canals of the centre. The houses there sell for millions, which is particularly crazy if you consider how relatively small they are.
Let me introduce you to Georgism, aka tax the land the building is bulit on, not the building itself. The more valuable the land the higher the tax, so developers build as much dwellings as they can according to the building codes. If they don’t utilize the building then the land may increase in value but so does the tax, in addition investment property or large mansions become practically giant sinkholes of money for the rich.
Check out BritMonkey’s more recent video about it if you have the time, otherwise I recommend the older one.
Less than 1% of homes in NL are unoccupied. You can’t look at a few streets with the nation’s most expensive real estate and extrapolate that this is a major issue. These areas are too expensive for most people to live anyways.
I'm in the south of europe and know multiple people in my family who own empty apartments for vacation or as investments, meanwhile my friends and myself struggle to find anything remotely affordable. There are digital nomads here but not that many. I met a couple of lawyers who owned an entire building and charged exhorbitant prices for studios. Yeah I'm not sure about the immigration theory.
It’s so nice to have a proper non-alt right video that mentions the effects of immigration without being overly careful with the topic
The way I see it, citizens of a wealthy country have a right to demand higher living standards, immigrants have a right to seek a better life for themselves. It's poor planning and government policy that sometimes makes those things mutually exclusive.
Honestly I think the problem with how so many people tackle the problem is that they frame it as "Immigrants taking up houses", which implies that immigrants (on the whole) are less deserving of houses than domestics. It puts the burden of a failing system and supply shortage on people who have the same general wants and needs as everyone else. Not to mention it's dehumanizing - it's why the alt-right gravitate to this narrative, since they already *do* believe immigration is a problem.
@@BaneofBalor They have a right to seek happiness, but there is no right to seek it in Europe. If you wanna have a comfy life you can build it at home, just like Europeans did.
Immigrating to Europe is NOT a human right.
@@BaneofBalorimmigrants don't have a right your country any more than a poor person has a right to a rich person's house or property.
@@BaneofBalor NO THEY DON'T. immigration is not a human right.
The problem is clearly that housing has become an investment, so rich people buy house and rent them out. Most politicians are landlords...
that's clearly one of the sub-problems, the issue with you pinning the whole problem on this is that that's always been the case, it's not something new, go back a thousand years and it's the same, perhaps without the incredible bubble that keeps the markets afloat
Years ago in fact nobody bought houses and rent them (rent was illigal in all europe until 2017 right)
True. But its not only rich people, its middle class, especially upper middle class too. People use it as a way of retirement saving or a way to store money in general.
Housing is an investment because of demand, it's not the other way around. If supply is high enough, the housing market crashes. In fact, look into cities with no demand (crashing populations), there you can find cheap living. In Italy you can get literally free homes in places nobody really lives anymore. Artificially deflating the supply by holding back real estate is something that exists and needs to be combatted of course, but it's a tiny factor in the greater equation.
@MetalOfYourBANA investing into houses accelerates building houses.
Houses have become investment assets. When a hedge fund comes into your city, buys up 1000 new apartments on the spot, well... good luck being a young family, looking for their new home. And more and more real-estate developers are building `investment` apartments which are minuscule in size, 20-25m2.
Corporations should not be allowed to own any real estate (apartments/ houses).
There should be a limit, on how many apartments/houses a person can own un-taxed. Above that limit property tax calculated on value of said property should rise exponentially.
or progresive tax own one normal tax own 2 double tax own 3 10X tax and so on :)
So basically we need back social housing
correct, I understood that he pushed the blame somewhat to immigrants and 'its just the way it is'
No, we need to stop laying rocks in building companies ways.
Also stop massive immigration 😂
@@lluchmartinez3586 dont even know why he pushed the immigrant issue since yes they are a factor removing that factor wont solve the issue in 10 plus years
@@hyperion3135those companies are not building to reach the market. Often we see flats to buy getting build instead of focusing on rentals
Now they can't sell them.
There is a major issue with the immigrants theory. The housing costs have skyrocketed even in eastern european countries which have until the war in Ukraine accepted basically no immigrants.
The main reason behind the rise of the housing prices is imo demographics and the era of the 2010's with extremely low interest rates. Mortgage interest rates used to be lower than inflation and you could thus even earn money by taking a mortgage. Because of that housing began to be seen as a great investment both by individuals and by companies. This started the price hike which made the investments seem even better because the property prices sometimes even doubled within 10 years.
The european governments need to put regulations in place so that housing is once again used and bought primary for living and not for investments.
In case of Poland you also have migration, but its internal. Poland still has over 30% rural population and probably 40% in towns
Because they still have migration. Internal but it still is migration
Here in Ukraine housing is still unaffordable even despite millions of people leaving the country. Old people are fcked in the head
The EU population has increased 1.4% total in the last 12 years, hardly a tsunami. In the Netherlands we have statistically more living space than ever before. The problem is, boomers have huge untaxed houses in cities, and the youth have none, and the countryside is emptying out. Allow urban densification and tax unnecessarily large houses.
The problem is that you get a house to raise a family, and once the kids are out a smaller replacement would be more expensive than what you currently own. So you loose an enormous amount of equity for nothing. You can't expect people to trade down for strangers, that's delusional.
So more taxes and more concrete is the solution. Blanket population growth hides the truth about the issue. Britain has seen an unprecedented influx of ten million people and their children into Britain over the span of a couple decades. No the issue isn’t your elderly grandfather or low house building rates. You disconnected buffoon.
@MorderkaiEdelblattsteinmeyerno they aren’t. Rurals aren’t driving the housing crisis. The influx of millions of migrants into the London and Parisian zone is driving it.
The problem is that you cannot simply look at the EU as a whole. In certain countries (e.g. Germany), the increase in the population has been much steeper. And you should not forget that we're speaking of millions of people without the means to buy or rent a home, and not just a few thousands.
@@first7589Germany’s population was 82 million in 2000 and 84 million today. Your assertion is not backed by any real evidence.
the housing crises (in Europe) is multifaceted.
you have (among other smaller reasons):
- people/investors buying available "stock" as an investment and trying to get as much profit as possible out of it.
and sometimes it's even done by letting a percentage of your stock sitting empty to drive up the prices of the stock you do rent out. (or sell).
because less demand means higher prices.
- not enough new houses being build to keep up with the population growth.
this could be because of government rules/policy, climate change, or investors/people not building the required amount on purpose to have prices go higher and higher.
- and of course the more people your take in form other countries, the more demand for housing there will be. and if you're already behind on the supply of housing, that extra demand is only going to make the shortage bigger.
- not enough houses being build because building produces greenhouse gasses, and some countries f'ed up and made their climate goals so strict that everything else comes second to those goals.
a few things that could be done are:
- having a law that requires houses to be lived in. so no houses sit empty, just to drive up the prices.
- putting a cap on immigration that is linked to the supply of housing. as long as there isn't enough supply, pause immigration (except for the few people that you really need to fill jobs like doctors).
and when you're back to enough houses for the current amount of citizens, only allow as much immigration as the surplus of houses that are build each year. this way there won't be a future shortage.
- declaring a national emergency, to make building more housing easier and a priority for the government.
the big problem (like with everything) is that these things will hurt the people with money and the people in positions in power. and we all know that top often these people are able to make governments do their bidding, over the backs of the "normal" people.
Maybe a land value tax could be interesting to reduce vacant houses, speculation on the housing market, and in general landowners profiting off the young & poor.
Also, making it easier to build from a regulatory POV definitely seems necessary: NIMBY-ism definitely isn't exclusive to the US/UK.
The video strongly suggest that there are no real speculative pressure. WE JUST NEED TO BUILD MORE
@@ivanshershnev9531Do both!
At Tobias: ideally there should be a land value tax *instead* of a property tax, but that can get complicated. Continental Europe also seems to have less of the problem we have here in the US (Canada has it too, so I'm told) of tons of places being zoned exclusively for single-family housing (and single-use residential so you can't just walk anywhere)
@@ivanshershnev9531 It's not enough: in expensive cities a lot of luxury apartments get built and sold solely as investment vehicles, no one lives there.
@@jeffbenton6183 Yes less of a problem, but it's still a thing, for example in the area where I'm from (Flanders, Belgium)
Really good video. A problem with the argument in Portugal is that you constructed much of your argument in relation with low paid immigrants but digital nomads are quite the opposite. While also taking up offer of housing they take it at a higher market value segment
Ah yes, I see your point, Initially I had a split segment on the impact of high skilled immigration, but it is a much smaller phenomenon. The Portugal reference fit in that logic, and probably should have been left out!
Cheers,
Hugo
Low paid immigrants are as big of a problem as wealthier ones. The rich ones directly pay more, but the poor ones are used to living under very bad conditions and want to save as much money as possible. So they go on to rent rooms or even beds, so a 3 bedroom that went for 600 starts to be rented for 300 per room, then some dont want to pay that so the landlord turns it into double rooms and starts charging 200 per bed. So in the end it makes the price of the rental double to 1200
Well, that’s what I thought to until others in different countries taught me about “gentrification”.
And then it really opened my eyes to the commenter’s concern, as in reality, it was a lot more common than I thought.
As suggestion, perhaps look into the concept, maybe even making a video? A lot of people could benefit from seeing the problem in different ways. :)
Housing prices have exploded in big cities, where high-tech jobs have provided way higher wages than what you will find in smaller cities.
The solution would be either moving economic opportunities to more regions, encouraging 100% remote jobs, redevelopment of smaller citites into "dormitory citites" for bigger ones, and huge investments into public infrastructure.
I appreciate your insights on this topic. You did a very good job explaining the most sensitive aspects of the topic in a respectful but honest manner. We need more content like this these days
I think there is one more reason you overlooked contributing to the crisis. That would be companies buying off many apartments in major cities as an investment to rent them out.
So one company bought one house on the market from someone who wanted to sell it anyway... I mean, the supply didn't change while the demand is increasing. If more people are entering the market and the supply stays the same, prices will go nowhere but up. You either allow skycrappers (which also have its issues) or you build more houses
@@HaimRich94 Yes, it was sold by someone that wanted to sell it. But it was not sold to a person that needed the house, but rather wanted an investment. This investment isn't for the person that needs just the house/apartment/flat, but for someone that wants to make money by keeping the property, but not allowing young to own it. Or buy it to rent it on temporary basis(AIRBNB and so on).
Boomers had it easy as they just dealt with the state and could(quite often) buy the property cheaply afterwards. This option isn't available for the young. They pay someone's else property - someone that is already much richer.
Now, we are getting into the stage when people are noticing it and are very aware this is happening and won't be able to have a good life at the end - they will have to pay for basics until they move on to afterlife.
His comment is correct, unfortunately.
@@nothereandthereanywhere
"His comment is correct, unfortunately."
No, it is not and I'm more than happy to explain you why as long as we are ok with a respectful debate. Let's go one by one
"But it was not sold to a person that needed the house, but rather wanted an investment"
If it was bought to someone who wanted the investment... What makes you believe that it wasn't an investment in the first place? or that it hasn't been a renting investment for decades and decades? The fact that they can buy it is because someone else didn't want that investment anymore (a house bought by a family to live there, is still an investment into equity).
"This investment isn't for the person that needs just the house/apartment/flat, but for someone that wants to make money by keeping the property, but not allowing young to own it. Or buy it to rent it on temporary basis(AIRBNB and so on)."
Let's start by the end, if someone puts it on AirBNB is because there is demand for that because otherwise people wouldn't do it... Do you want to avoid that? Easy, build more hotels and if businesses are not willing to build more hotels then is because something made by the gov made it cheaper and easier to have AirBNBs than hotels (I mean, ;D maybe the job market is not attractive there?)
Now talking about owning it, ask the gov to allow more buildings (and higher buildings) so there is more supply so the young can own it. You know who is the first person that will tell you we don't need to make more houses nor allow more AirBNBs? The one who already own them and has AirBNBs ;)
"Boomers had it easy as they just dealt with the state and could(quite often) buy the property cheaply afterwards. This option isn't available for the young. They pay someone's else property - someone that is already much richer. "
Nah it wasn't that easy as people like to say, today people buy with less than 5% (and a lot of people had locked sub 2% rates) interest rates while boomer paid up to +10%, their benefit was that there was a lot of supply to buy from so prices weren't that high.
Now, let's talk about the first comment: "That would be companies buying off many apartments in major cities as an investment to rent them out."
This will vary depending on the market, but for example in the US a lot of people blame institutional investors for owning too many single family homes... but that's a myth, the fact is that they own a really small amount compared to the whole market, according to John Burns Real Estate Consulting is less than 1% (but let's say is actually 100% more, so they should own something like 2% of the supply).
The hard truth is: You either kill a bunch of people like during wars or build more houses because if population continue increasing and the supply stays the same, the prices will increase at (more likely faster) the same rate.
Why would that be a problem? Who are they renting them to? Aliens from outer space?
@@Vektab mostly those places are rented out for short stays, like AirBnB. because you're able to ask more for those stays than if you rent them out to a family that needs a place to raise there kids in.
so housing that should be used to house citizens, is used to house tourists.
so the supply might stay the same (on paper), but the people that used to live in those houses get priced out and can't afford it anymore. or even aren't able to rent those houses anymore, because they aren't the "desired" clientele
I think that the biggest reason for housing shortages (at least in the UK) is strict zoning laws which prevent housing being built in areas where it needs it. For example, green belts around many cities restrict growth and since there aren’t any empty plots of land that means that buildings needs to be tall which in turn often prompt community backlash. In my opinion, most green belts shouldn’t even exist since it’s mostly private land anyway and in most cases doesn’t contribute much to environmental protection.
Being from the US, I agree. It's a tad slobbering to see that continental Europe also has a housing shortage because they actually have the mixed-use zoning laws we seek. He makes a compelling case that people just stopped building during the demographic decline. In other words, the problem is multi-faceted and so will be the solution.
Environmental protection is generally not the argument for green belts (and if it is, it is generally pretty weak as you say), it's food security and preserving rural character (which in the UK is something of big cultural importance). Personally I think the UK has a problem with overconcentration of the economy in the south east, which puts a lot of pressure on London and surrounding areas and greatly exacerbates the housing issue. It would be a lot easier to deal with if we didn't have to keep building homes in areas that have already nearly been completely filled up.
@@Croz89 I’m all for preserving character but much of the green belt is just fields and it already borders cities. The UK has a lot of farmland so taking away Greenberg’s wouldn’t make much of an impact. There was a study which showed that reducing the size of green belts by just 10% would allow for the construction 7 million homes. I’ll put a link to a video which talks about it as well as other issues related to housing.
Edit: I found the link. He talks about green belts at the 22:15 mark ruclips.net/video/b5aJ-57_YsQ/видео.htmlfeature=shared
@@TheLiamster Not all greenbelt is created equal mind you. Some is more agriculturally productive than others, and a lot of that is in the south east. And really anything which increases UK food imports even a little is not going to be popular. Agriculture is seen as a very important industry which is already struggling.
I have watched some of that video, including the portion on housing, and it's an interesting if quite radical position to take. I do think he is boiling down a complex issue and only considering one simple solution. As I said in my comment I think a lot of the problem is caused by regional inequality and the absolute economic dominance of the south east. There are other parts of the UK which could support a lot more people (some are basically post industrial wastelands) with minimal impact on prime farmland, if only the economy was less London centric.
Ah yes, let's pave over everything.
The best solution would be to establish new cities by combining existing ones and grow them into one big city and make high speed train connections. When everyone for example wants to live in Berlin, you need another Berlin. There is no general housing crisis, there is cheap housing everywhere except in the big cities.
I'd go further than that... I think that establishing brand new cities in underdeveloped areas of Europe would help a lot. Obstacles to new development such as Nimbys, cost of extending old railways, having to knock down old buildings, etc... all become less pressing issues if you start off in a "greenfield" project. It is definitely not the kind of project that private investors will be interested in, but state-sponsored large projects can be viable if we don't go megalomaniac like Saudi and other Arab countries.
In both countries I've lived in (Portugal and United Kingdom) I think there would be a lot of great opportunities from developing a new capital city from the ground up like they did in Brazil and are working on in Indonesia and Egypt. For the rest of Europe, the brave choice would be to move Eastwards, rather than having the economic, finance and political centre too concentrated in the NW of Europe. Perhaps the European Parliament should meet in Bucharest, Krakow and other cities rather than just Brussels and Strasbourg.
Thank you Hugo for being a journalist and making a lot of useful videos about Europe!
People should support your Patreon
Thank you very much!
Great work you did here! Keep it up and place track the developments over time (Updates on the topic are very much welcomed)
The issue is that the private market has become so powerful that (up until recently) they could do whatever they want in countries like The Netherlands. There was not really an incentive for them to construct a lot of houses because a shortage of houses would increase the prices even more. Over the past few decades, private investors haven't added that many houses to the market as some may think. And due to new laws, owning and constructing properties becomes less attactive, so investors just simply stop funding many projects. It shows that they only care about the money (surprise surprise!), so that's why we shouldn't give them too much power. The private market simply failed, and many young people have to face the consequences of this mismanagement, partly caused by former Housing Minister Stef Blok, who got rid of the complete Ministry of Housing. Social housing corporations should build the fast majority of affordable housing for the lower/middle class again, like they did in the past.
So there are laws that make investment in new construction unprofitable, and your reaction is that this means the private market has failed? And the solution is to give more power to the government?
This type of idiocy is why Europe is in decline.
Private markets have definitely failed across the West. But why is the discussion always about private investors versus social housing (government owned). Isn’t there a middle ground where the government/a state run company could be fronting the investment money but then selling off the development to make a small profit. Somehow it seems that the private market isn’t interested in these profits but would rather invest in existing stock’s value continuing to grow.
I think you don't get the point I'm making. Even when it was very profitable, the private market didn't add many new houses to the market. Instead, they bought a lot of houses to "milk them out" as we call it here. Creating scarcity and pumping up prices. After the WW2, the government also took control over the housing market and constructed about a million social housing units all over the country, which solved a big part of the housing crisis back then. Investors can still make money with properties under the new regulations. There are fundings and benefits to support them, because we need them. But the profits they can make aren't as high as they were before. But in many cases, they can still make profit! Housing needs to remain affordable, however. The private market hasn't been able to offer this. Instead, the opposite happened.
The main reason the state can build "affordable housing" is that they often already own land - so that falls out of the equation making it "affordable".
I just renovated a house and you would be absolutely shocked at how much it costs to buy and install a sink, or to get a few electrical lines in. Trust me. Building is painfully expensive. If you think cheap housing is possible you're delusional. I guarantee you it's not possible. Housing was never affordable. It's always been expensive. And esp in the big cities. And even more so for the standard people expect amd see as normal nowadays.
@@mysterioanonymous3206 No, there were times before when houses where affordable, even for the lower and middle class. There are always solutions to make things cheaper. I'm not saying the houses will be cheap.
One part of the solution could be what the UK started doing just a few months ago: sharply increase council tax (or taxes similar to that). In the UK landlords pay council tax which can vary widely, for example £500 a month, which pays for some public services in the area where the house is. Since April, empty homes in the UK pay a 100% council tax premium. In Cardiff in Wales it's a 300% premium. We have £50 billion worth of property sitting EMPTY just in London alone. They could make laws for properties to pay a 10,000% premium if they are sitting empty for 5+ years. Landlords are rich enough. Use the money raised through that for actually affordable housing. Also where I live many houses are empty and up for sale for years, yet we are crammed into houseshares where even on a decent salary you pay 30% of your net salary... for a room. Not a flat, just a room with thin walls where you can hear everything your housemates do. And still 1 hour away from your job.
I don't think this will make much difference anyways. Sure £50 billion may be a big number but then how many homes are we talking about?
Considering big detached homes in London cost a few million pounds on average, you are talking about at most a few thousand homes which is like less than 0.1% of the total vacant homes in London.
Are you going to liquidate those assets? Cos that's how this sort of wealth tax will only bring in more money to the economy.
It won't make a difference to the housing crisis as £50 billion in the grand scheme of things is a drop in the ocean compared to total cost of houses that would needed to complete alleviate the supply issues that any Western country faces.
Taxing empty homes seems like a good idea and also justified, but how to enforce it?
Regardless, I doubt it will raise enough money to fund social housing as these are a relatively small number of expensive properties concentrated in popular locations, such as London.
The real problem is foreign ownership. Most of these empty homes are cash purchases by rich foreigners trying to avoid paying tax on their assets.
Awesome job,!!!
This is such a well-thought-out video! Very clearly delivered and well balanced. Thank you!
You forget building ground! So important. When wanting to build cheaper they always talk about cutting on quality or regulation. But that is a stupid way to go. When I make a house a less energy efficient I might save a bit of money but the owner/ tenant pays that 10 fold in the years after.
Governments need to take control back on ground. It takes up such a big portion of a house price and it is all speculation!
Also finances. House prices are so high because of financialization and investors benefit of scarcity . I totally miss these aspects in your video!
Its not just demographic
It also has to do with the concentration of development and therefore wages to a few spots in the country
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I think the people here have it ass-backwards. The housing-crisis isn’t caused because people (be they individual landlords or cooperations) want to rent out apartments. That’s not the “investment” aspect of housing that’s screwing us over, it’s the asset-appreciation of housing itself. Whether you, someone else, or a big company owns your apartment should make no difference to the rent at the end since all three parties would have the same bargaining power (for the case of you owning the apartment, just change “rent owed” with “potential rent/opportunity cost”).
The housing crisis is caused by a lack of units being built. And this is almost certainly because of zoning and this is more the fault of individual homeowners than big companies. Here’s why: if you only own one unit of housing and are unlikely to get another one, the main avenue you have to raise the value of your asset it to limit supply. If you’re a big company that can make more units, you’d like to add more supply because even if per unit price drops, the amount of units you can sell increases and so does total profit (even if average profits drop).
Furthermore even if homeowners don’t want to cynically inflate their major/only asset, their incentives are such that they can just veto development at the slightest inconvenience (new construction blocks their view, new (poorer) neighbors, slightly more congestion/noise, etc). Most people don’t like to hear this, but this is the main reason home prices have become expensive, largely bc the majority of voters are homeowners and thus politicians are incentivized not to reduce home prices, hence why the vast majority of “housing measures” are rather ineffectual demand subsidizing measures (cheaper credit, housing vouchers, etc) which will just inflate home prices even more.
how hard is to make rental unprofitable ? if you own a property and is not the one on your ID, drown it in taxes so it becomes unprofitable to rent out. besides, investing in real things can spur gdp growth too
the lack of housing facilities is not the main issue. The problem is that many of them are empty and used exclusively for speculation by large concentrated groups. Best known examples could be the thousand of empty luxury buildings along the spanish coast. Immigration is not the main issue...
No point in even trying to criticize the private market and its inefficiencies, mate. It’s always gonna me the immigrants’ fault for most people…
@@Joe-cb6exI won't stop saying that it's caused by no political impetus for major parties to address
Housing seems like diamonds now it’s artificially high in cost due to it having become a speculation market, one would think demand = more building and thus fair prices but thats just not the case anymore. In my country after they stopped building social housing there was a speculative boom and prises rose rapidly. I think it’s fair to say the quickest fix is government intervention however it might not be the best fix.
Also one thing that everybody seems to fail to mention is that young people today expect to be able to buy housing so early in life, like mid 20s to early thirties, before this was not the norm at least in my country. FOMO and all these pressures combined makes it a idiotic speculative bubble, i hope myself i can just find somewhere in a smaller place outside of town
I think one of the issues is that residential housing has become an investment asset in the last decades, and for a lot of people their houses are their only nest egg. Governments are indirectly forced to keep housing supply low to keep the older voters (which vote more) happy.
If you open your borders for long term economic immigrants to easy a labour shortage problem, you must keep in mind that they will also need a place to live, and a spot at the local school for their kid to integrate into their host society, and some associated medical expenses. Not taking this into account when managing immigration is willful ignorance.
I know some governments would love seeing immigrants arrive at 8am from their country country of origin, work all day, buy their groceries in the host country and take the national airline to fly back to their country of origin at 5pm. Unfortunately that's not realistic.
Please make podcast episodes with those videos. I am not that often on youtube, but your videos are always so insightful!
born in vienna, grew up, studied and working here. my salary is decently above average, especially for my age, and even with frugal saving and investing i will most likely not be able to afford raising a family here
How is that possible? Vienna seems to be one of the cheapest bigger cities in Europe to live because they have so many social housing units?
In Vienna real estate and rent are cheaper than anywhere else in Europe
Funny, because Vienna has the largest stock of publicly owned apartments anywhere in the world. Maybe you're just incompetent on your above average salary 😂
Good informative video!
Not to forget a stagnation of the real estate prices would potentially lead to a huge economic crisis. Usually it’s not in interest of the governments to undergo a decline or a stabilizing of the housing prices.
Stagnation would probably be OK, a sustained fall would be disastrous. Millions would have underwater mortgages, therefore literally unable to afford to sell their home (plus being put on the worst interest rates). Governments would be under a lot of pressure to bail homeowners out by either paying the difference to the bank/building society or forcing them to take a haircut.
forbidding short-term rentals for tourists is such a stupid idea! It is literally limiting country or city tourist income. Get nimbies under control, build more and prevent property being bought by investors. Real estate has long been considered as a good investment option with home prices constantly growing. This should end! Make sure no one can from real estate speculation, and this will solve the problem!
Romania has less redtape when developing (this not all sunshine and rainbows but it makes owning your place more affordable). Both houses and apartment buildings get built to cover demand. There is some social housing (ANL) but that is a drop in the ocean and I think the renters have a path to ownership which they mostly take, also due to the culture of owning your own place. I bought my 100 m2 3 bedroom house for 115 k euros before the war in Ukraine, now it's probably 20-30% more expensive which is basically the inflation rate. Depends also on the region as bigger the city the higher the prices. Also everywhere in Europe you can find cheaper places in areas that are not so well off economically and I assume working remotely might help a lot o people to perhaps live in cheaper rural/small town region and mostly tele-coumute.
Great job on this
People saying "Look at Eastern Europe, prices went up and there is no immigration" are wrong. If it's anything like my city, there may not be big non-EU immigration, but I noticed much more German, French, Dutch, Belgian and other people in my city (basically in-EU migration), mainly older folks or digital nomads, who have ability to work or live in my city with no requirement to be fixed in their country of origin. 10-15 years ago you barely heard anything but local language, or at most German. Now in some parts of the city you barely hear language of my country and I'm not talking about tourists.
Great video! I say build better public transport between urban centers and more rural regions to make the latter more attractive
Georgist Land Value Tax and legally binding house building minimums could solve this. They just won't because that would be bad for their investments.
The probem with georgist LVT is that is supposed to be a high tax, so the social dynamic would end up that the average person would no longer be able to afford their home once they retire. sure they could resell and move somewhere cheaper, but that's not in line with what people mean when they say "owning a house"
@@zzzzzzzzzzzspaf simple solution - no tax on your place of living (limited to one property)
I know the ASML story very well. I used to work there and even though the salaries are high, you end up paying a big part of it for an overpriced apartment. apart form that you also suffer other side effects of the company being overcrowded like absurdly long waiting times for parking, no office space or even toilets being constantly occupied. Of course remote work is not a possibility since the company is pretty much run by boomers.
The conclusion is that it is better to simply work somewhere else so you can take more money home.
Good review.
I live in the netherlands. When i bought my house in 2018 my parents warned me it was expensive at the moment. I said waiting makes it more expensive. I'm happy with my choice :3
I appreciate your perspective and very much have to say it is refreshing to see someone give answer that is inconclusive with the current data.
I think a point you are missing in your analysis is the growing inequality between the middle class and the ultra rich. This is a large indicator of why asset prices (in this case real estate) is going up even though interest rates are growing. A wealth tax and an end to tax havens could solve the issues of government debt and help them fund more affordable housing as the market is more interested in luxury apartments in large cities than large housing complexes.
Yess, I agree, I decided to focus on the demand side more for this video - which meant I neglected some other points.
Cheers,
Hugo
A problem that affects the housing market in Europe is the population moving from the country side to the City. In France for example, there is a surplus of housing in smaller rural villages that you can purchase for less than a 100k. Italy, famously offered the house for a Euro scheme. Back to France, some of the Migrants were refugees and are being housed in the rural districts like in the east. Doing manual jobs that the young Europeans do not desire. The same thing is happening in the US as well. So, much of the housing pressure is relocation within the country of rural to city.
Verry nice inside for such young man!
@intoeurope Your follow-up video about 1 euro homes in Italy actually got me thinking about a solution... those villages are emptying because it is expensive to provide there infrastructure, services and opportunities which people need. So that's exactly the action: provide just enough infrastructure to make decentralised areas more liveable. Additionally, promote flexible working arrangements as much as possible as those allow to find opportunities not only in big cities but everywhere.
More social housing is the fastest way to fix this, in my opnion.
states should most definitely prioritize their citizens over others but public sector sure has some slack to pick up with housing
As an architect specialized in the real-estate market, what I can safely say is that the housing crisis’ single cause is the speculation behind real-estate and its rapid valuation over time. It is ridiculous sometimes, if you stop to think about it, how a wrecked 19th century apartment in the champs elisées can cost ten times more than a villa in rural Spain.
Its two different problems, the lack of housing is basically because its illegal to build a house or tear down an old one to build high rises. It is not because the lack of government built houses, the free market is able to provide every other type of good without government intervention, and same goes for housing.
Immigration and lack of new houses surely contributes, but you left out speculation and the long spell of very low interest rates that fueled the buy to let phenomena and generally that lot of people could "afford" to but houses driving prices up, until interests rates went up.
You could build cheap apartments even with market rents.
Imagine building an empty box. And the renter buy their own fridge/stove for example.
One thing old people dont need houses and have leverage over younger voters
150k for an outdated house in the countryside when your salary is 20k (Southern EU) is madness. A decent house starts at 250k. If you go to a city this number doubles
4:33 the increase in demand, by definition, is not unprecedented.
an easy way to solve this housing issue could be to simply make illegal for retirees to live or own anything inside a city, force them to sell any city property they may have, and force them to moove to rural countryside. retirees don't need to be in cities, since they do not work anymore, hence, don't need to be in close proximity to jobs. and since jobs are mainly concentrated in urbanised area, it is only natural that living in a city should be a working-age-people thing.
beside, this forced retiree exodus toward rural areas would have the effect of redynamising the countryside (as more inhabitants for the vacants unhabited housing in the countryside, and more people with a passive income (retirement pension) going there and spending their passive income into products.
There is another reason, vacation homes. I live in a small village and about 30% of houses are empty 90% of the year. Bought up by richer older folks as a vacation/second homes.
The price of new family houses has gone up not just because the reasons mentioned in the video, but also because the plots (land estate) has became much more expensive. The plot prices multiplied in couple of last years in Czechia. This reason should be examined in videos about home prices.
I assume that the reason is the same as the rise of appartment prices: is the supply-demand dynamics. May be tightly related to the the fact that real estate is not just used as housing but also as investment, not only by rich people but also by the middle class, especially upper middle class. They use it to store money, either the money they inheroted or the money they want to safe for retirement.
Another point which was left out here is the change of the family structure
More people are living alone and occupy more space
Investing into housing or just owning more than one houses has become pretty popular for the rich (my neighbor, lol)
Combine this with all of them moving to a few parts of the country while less developed and more rural regions are being emptied
It might be important to mention the market pressure on mediterranian areas for summer investment took away all year long livable places from locals and younger gen as well since real state has no interest over building afordable housing.
Sorry but you totally miss one point: internal migration. People are leaving the countryside and moving into the cities. And this pushes up the prices. In Hungary for example there are hardly any immigrants (2,5% of the population) and there is also a massive emmigration and still there is a massive housing crisis. Few weeks ago I read an article about this. The main causes are the regulatory hurdles (no, not the environmental regulations), the increase of the building material costs and labor shortages. I assume, other eastern european countries have the same problem and not the immigration from outside.
In Germany for example is the situation similar. People not just moved from the contryside to the affluent cities, like Frankfurt a.M. and Munich (Minga:)) but from the former eastern Germany states to the western Germany states. The total number of the population has grown insificantly in last 50 years. In 1974 it was 79M now 84M. It is a 6% increase. If there would be a cut in the immigration, the construction industry would collapse. The problem here in Germany is also the burocracy, building material cost increases and labor shortages.
I wish people would give up blaming immigration for housing shortages. Europe needs immigration, there is a massive labor shortage and the fertility rate is 1,46 in the EU. We are getting older and there is less and less taxpayers to maintain the welfare state.
In my opinion the solution would be to incentivise people to move to the "cheaper" places. and to build more (private and publicly owned) homes.
Just adopt Freedom to Build Housing Policies & Zoning Regulations from Japan. It will make it much easier for supply to catch up with demand. You can even put stipulations to keep the same decor/style so the culture isn't watered down or lost.
All of the above option please...
Allow the construction of residential areas made of containers, BUT just as a temporary measure, like 5/10 years, they are chep in the 10.000€ ~24sqm (I can do it in that price), quick to market (2 months), and this will provide lots of habitational solutions to people in need, even we can find an architect/designer who can create 6/8 story container buildings with grace and style and make those attractive to the people and the eye, And as a temporary measuse, the city hall can provide rent access to public soil to build such buildings. every 5/10 years the need for such solution should be reviewered as the tenants must know that they can not live there for ever, just a 5/10 year period contract, the time to find a more permanent solution.
I see as well the influence of the COVID into the housing prices.
At first the pandemic caused landlords to sell their properties, therefore these houses aren't available anymore for the market after the sell.
And with the cost of materials and the European burocracy no new houses were built fast enough, causing a pressure on the prices...
Take a look on United States, they had this problem and now with the rise of interest rates + a lot of new construction the housing prices stopped rising.
They still have the housing prices high, but it's getting better when compared to Europe.
There's 3 main reasons for this increase.
1- the one from this video is population increase due to migration. Which is fair... We've been, for a long while, using migration to compensate for the lower birth rates in order to increase our economies productivity but that doesn't explain how so many houses left the market suddenly since... As stated... Migrants CANNOT usually afford housing and this is a problem that started in the US AND EUROPE AT THE SAME TIME. Unless migrations have increased exponentially that is NOT the main driver, at least not alone.
2- (which is touched briefly) housing distribution. while there's still more houses than people (Portugal has 3 houses per inhabitant even with migrants) those are not distributed uniformly and major cities have still grown massively (immigration, company centralization, both the economic crisis and covid making low to mid end jobs scarcer...). People who bought houses very rarely sell or rent because they were bought to be used as second housing for when they go to work while their family house is further away from their jobs and even as they get older they now tend to move between the 2 as they need more frequent medical attention which doesn't exist in the rural areas.
3-the current run to investment. Everyone and their mother is now an "expert" on the market and everyone is after that sweet, sweet "passive income". Investment companies have multiplied like mushrooms and there's a lot of people with around 1million €/$ due to the increased demand for programmers and the bonkers growth of tech companies. Young people are also more likely to own investment options and have more access to money to invest. While larger investment companies are followed closely and try to not make their investments lean too much on the housing market since the last market crash, those new investment companies simply decrease the risk of their investment options by... Buying property... And since most property taxes are paid annually they can simply buy housing, wait 6 months, sell that housing and since everyone is doing it in large amounts this creates effectively artificial scarcity and thus they profit without having to pay the major taxes, getting constant returns with minimum investment (you can see this in Portugal were the money collected from the IMT tax has surpassed the values from IMI tax, IMT being a ~1% tax paid on buying a house while the IMI is the anual property tax, which means there's FAR more houses switching hands than property itself).
Adding to this banks had a lot of property on hand since the last crisis which made them a very cheap as an investment source.
And since housing needs are more or less inelastic (while migration increased, total population stays more or less the same, which is why we need and how we manage migration in the first place, this makes housing needs pretty much the same every year).
This extra demand for housing to use as investment unbalanced the offer/demand scale increasing the price of housing and placing extra burden on the rent market.
There's other minor reasons like the decrease in public or social housing (as mentioned in the video), or the covid epidemic giving people some extra economic leeway due to government support and increasing birth rates which lead younger people to consider buying their own home but the housing market had been staying pretty much stable for a long time and this sudden change cannot be simply explained away by "immigration".
As a note... NONE of these reasons are bad by themselves. The problem is the market was basically balanced on the edge of a knife since the last market crisis (which WAS a housing crisis make no mistake...) and banks had too much property on their hands they wanted to get rid of.
This will never stop as long as residential housing remains a good investment. Subsidising first time buyers doesn't resolve the problem with supply, it only increases the prices for future buyers. Social housing just might relieve the pressure.
Another important point is age and the state of our social contract - which is in a very bad state.
If I take my great grand parents as an example, they all were born around 1900 or 1905. Nearly all of them - and most other people in that generation I happened to knew - lived in their own house until their very end. And all who lived in their own house did so with their own children who cared for their mother and/or father.
Up until the generation of my parents - boomers - that was the social contract in my area: Parents build a house, get a couple of children and one of those children then has to take care of the parents when they grow old and in return gets to live in that house for free and later would inherit the house.
Around the 80s and 90s, that changed and all of my grandparents - who all took care for their own elderly generation at their time - are now in care facilities, because none of their children was willing to take care of them. Instead, their houses got sold off and now my parent generation all live in small appartments for rent and lament about high rent costs. And no, job opportunities or urbanization weren't realy that important in that situation - my grandfather for example never found a real job, but still had a good life in the countryside, because he never had to buy fruits or vegetables, since he could grow them himself.
His daughter sold off the home, when she was unemployed and moved into a city - still unemployed. Why? Because gardening wasn't her thing.
YES, Europe did a lot in the 50s and 60s to comfort the boomers, houses were built, but also schools or universities. And boomers haven't realy taken care for all what has been done for them. As I said, when my great grandparents and grandparents retired, their life started to rotate around things like caring for the grandkids or working in the garden, reading, making music, cooking for their children, who lived with them in the same house, washing, drying and ironing their clothes, tutoring the grandkids after school or doing stuff for the church or other NGOs.
My mum retired just a year ago and since then has already been on four vacations. She could have saved up some money to buy a house where I can live with her and take care of her and which I later could inherit and at some point pass on to my own children - but in her eyes, it's my job to buy a house and then offer her to live with me until the end of her days.
Our social contract is broken.
you're report is primarily based for countries that have population growth, what do you think it will happend to countries that don't like eastern europe
There are very easy solutions to increase the supply and availability of apartments. Simply, invest more money into infrastructure (e.g. local trains/trams) so there will be more space for investment. Reduction of regulations would also help. I cant understand why the governments don’t do it? Any action taken should focus on increase of supply.
Why don’t we focus on converting office space to residential space (with governments’ help), given the spread of remote work?
in ireland the goverment sold 2 thirds of our social housing plus we have vulture funds who buy up entire estates before any normal person can purchase on top of that the mrtage system is broken paying off a mortage on a average house was 500 per month yet today people paying up too 2 grand on rent cant get a mortage its broken
One of your best videos so far!
We need social housing for the working class, that is the only way out of this and the demographic crisis
yes, but one muslim with 4 wives = 4 children every year = easy social money for all= lazy life always and forever
Regarding labor shortage, it feels like too few people educate themselves to take blue collar jobs. In my country we have an over supply of media and communications majors for example.
Well, in Holland the only increase in population comes from immigration, which has been quite sudden in the past few years. So it can directly related to a lack of housing, which also has been quite sudden. Also, much social housing was poorly built and has already been demolished after 50 odd years. And what is being built lately has mostly been bigger, expensive houses for sale on the market, many of which are being bought up by investors whom, in turn, rent it out at astronomical rates. Also, more people are buying 2nd and 3rd houses and rent them out e.g. via airbnb.
In Germany there is currently little political acceptance of the notion that immigration can or should be regulated through the lense of economic benefits - something that has been common sense for decades elsewhere. This has exascerbated many issues and the question of housing specifically - the latter being primarily an economic matter in the end of the day. Even worse, there seems to be no realization among the country's current leadership that the way things are going now can easily lead to large backlash with rightwing parties coming into power in growing parts of the country, something that the polls are in fact already indicating. Given the country's history, there is a huge ongoing discussion in politics as to how to best fight these parties. However, there seems to be no acceptance of the idea that a real change in policies is needed.
It's not only an issue of wealthy EU countries, the same issue happens in countries around EU average or less, like living costs rising around big cities (then around towns around big cities). In my country about 8 issues are being mentioned. First it was state or city owned states being sold for cheap in the 1990s for various reasons, now they push for new ones being built. Cooperative housing used to be a thing, now it's rare and not that well supported in my country. Gen X baby boomers wanted to invest into something solid and with cheap mortgages many people did, local, foreigners, physical or not (companies, funds). Also one minor factor are citizens of wealthy EU countries not only investing, but actually moving here.
Comparing London or Paris with Prague is like comparing Los Angeles or San Francisco with Boston or Raleigh in this matter, but the issue exists.
As stable as the thumbnail images to this video.
Another option is to facilitate renovating and tearing down unusable properties. Its surprising how in many cities with housing crisis you see tons of abandoned houses and even buildings that are not been used, well they are used but by criminals. Even in rich countries like Ireland you see that.
It is also a matter of ageing people and space: there are many more single people or smaller families but the type of offer doesn't match the type of demand; baby boomers still live in oversized properties for their family nucleus.
You forgot to mention the heavy money laundering and massive procurement by rich foreign investors...
I have a Car. My neighbor has 10 Cars, he mostly uses 2 and the rest keep a permanent parking spot on the street... Sure he "pay taxes" on all of them, so the goverment could build more parking... but there is no space in my street, I gotta park 2 blocks from my house.
Can't understand how the end of the issuance of new golsen visas in Portugal would lead to existing digital nomads to leave.
Our government really is shit, so I wouldn't be surprised if it did somehow
We need to mandate remote work to alleviate housing problem
Great replacement fact
i am an immigrant but i am also an economics PhD and even though it sounds wrong european countries will go into debt if they give social housing to immigrant. I lived in denmark and every year i go back, I find my friends struggling. You have to understand that if immigrants don't respect the heritage of their country and give to economic growth the original population will suffer in incoming years. Their culture is laid back and liberal and most immigrants don't change much. My parents never tried to integrate with locals and I don't thin most people do. Only a fraction of people give positively. My fellow immigrants friends are still working minimum wage jobs but they have gotten married (to another home country) and have multiple children they can't support. Goverment need to follow what qatar, UAE does. They are sort of like EU to citizens and USA to all foreign nationals which has contributed positively to their economy. I understand plight of both, but finances don't work with altruism.
6:29 - Poland's share of immigrants is really tiny (
They build new homes, but they do it for higher classes.
Governments need to build more affordable housing, like how they used to or give some major tax break so building lower income house can turn into a profit.
Social housing and crack down on loopholes for corporations that own many real estate properties. Also, increase taxes on people who own more than one property. Stop treating property like an investment and more as objects for living for people.
Unaffordable, undesirable, low quality housing is a big issue in Canada and the US atm as well.
I just want the whole system to crumble at this point.
They are building cheap low quality hosuing all around me. But the prices are unaffordable for the average wage in my state. I live in one of the top 10 moved too states in the country and I just dont get it. We dont have good jobs or good housing.
My mother bought a town house in the 90s for 40k usd making less than 15 buck a hour. All by herself.
New townhomes are 200k and I only make 15 as a electrician.
A actual house is 300k and up and of course low quality materials, tiny yards, not much parkign space, and cookie cutter dystopian looks.
Its completely flawed.
Perhaps build more spcial housing and limit the number of houses private home owners can have.
Join the club! Canada has a small population but we are lacking homes too! Like a lot...
let's ignore that in the 60s and 70s there were not huge immigrant waves from Greece, Italy or Turkey into Germany or the Netherlands among other countries.
And lets hide the fact that the entire second part of the video is about the fact that construction stopped in the 1990s after the baby boomer generation came of age.
Cheers,
Hugo
@@IntoEurope Yes that point you addressed very well. And I pretty agree.
Vienna built great great social housing. I think they're an example to everyone
This video alone would deserve a research grant. For commenters: if you have a pet theory, then make a well-researched video, like this one. Don't base yourself on some anecdote that fits your narrative.