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0 pointstmnvix2y ago0 comments

> The problem is lack of supply vs demand.

My point elsewhere in this thread is a that demand is not entirely a function of demand for homes (what I would call 'natural' demand). Finance and tax incentives play a large part too - encouraging demand for investment properties that are often not used as homes (what I would call 'artificial' demand).

This is not to say that addressing supply through more building is not helpful, just that there are other things to consider that may not require as much effort and can have broader economic benefits (e.g. changes to the tax system to encourage productive rather than unproductive investment, credit guidance, etc).

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robertlagrant2y ago· 1 in thread

> demand for investment properties that are often not used as homes

Could you elaborate? How often is "often" in the context of the whole country?

> This is not to say that addressing supply through more building is not helpful, just that there are other things to consider that may not require as much effort and can have broader economic benefits (e.g. changes to the tax system to encourage productive rather than unproductive investment, credit guidance, etc).

If the UK is gaining enough people to require multiple cities the size of Oxford to be built each year to accommodate them, it would be surprising to find that the main issue is people are replacing houses with other buildings.

tmnvixOP2y ago

> Could you elaborate? How often is "often" in the context of the whole country?

According to this document (https://www.oecd.org/els/family/HM1-1-Housing-stock-and-cons...) 10% of dwellings in the US are 'vacant dwellings and seasonal/holiday homes'. In other words these are not owner-occupied - and what I would classify as investment properties. Now these are not all the investment properties, obviously. There are many investment properties that are permanently tenanted.

Assuming that about 65% of homes in the US are owner-occupied, then we should be able to assume that the remaining are investment properties (remember I include holiday and second homes here). That means about 30% of investment properties are not used as homes (i.e. the 10% mentioned earlier).

Investors are removing a lot of dwellings from the permanent housing stock.

It is worth keeping in mind that when you hear references to a 2% or 3% vacancy rate, this usually means the percentage of dwellings in the permanent rental market that are currently vacant - not the percentage of total dwellings that are vacant.

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