In my opinion, the reason we see these housing prices increases is because it has become a pyramid scheme and a bubble at the same time. It has become a zero-sum game.
Because the goverment is not taxing houses, the bubble keeps growing.
An average apartment in Berlin is like 500k. If there was a 10% tax on real estate, it’s value on the market would drop instantly because it would no longer be profitable to have a business based on the most basic human need , having a room over your head.
The people that own the apartments and houses would quickly sell it to avoid paying so much in taxes and the value of the 500k apartment would reach 100k in no time.
We can’t build more houses because the houseowners are lobbying against it. They don’t want their houses to lose value. They also use propaganda tactics saying there’s an “environmental impact”.
It’s also in favor of the old, because they have already bought their houses when it was cheap. They’re using this wealth to sustain their retirement plans while we some of us young people can’t even afford to study because we have to work to not be homeless.
If the goverment taxed real estate and the bubble burst, it could then mobilize and build more housing without rich people protesting against it.
It would also be cheaper to build. I doubt cement and bricks went almost 10x in price over the last decades like houses did.
If we don’t solve this issue, the consequences will be fatal to all of western society.
One of the reason the baby boomer generation was born was because after WW2 the goverments built a ton of houses. What happened to our society?
This is general asset price inflation caused by low interest rates filtering through to housing over time. See how the yield of housing went down (rents as a proportion of house price) because low interest rates mean money moves around to chase higher yields (thus lowering them where it ends up in the process).
give it another 15 years and the problem will solve itself in most western countries
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Housing is a pyramid scheme
In my opinion, the reason we see these housing prices increases is because it has become a pyramid scheme and a bubble at the same time. It has become a zero-sum game.
Because the goverment is not taxing houses, the bubble keeps growing.
An average apartment in Berlin is like 500k. If there was a 10% tax on real estate, it’s value on the market would drop instantly because it would no longer be profitable to have a business based on the most basic human need , having a room over your head.
The people that own the apartments and houses would quickly sell it to avoid paying so much in taxes and the value of the 500k apartment would reach 100k in no time.
We can’t build more houses because the houseowners are lobbying against it. They don’t want their houses to lose value. They also use propaganda tactics saying there’s an “environmental impact”.
It’s also in favor of the old, because they have already bought their houses when it was cheap. They’re using this wealth to sustain their retirement plans while we some of us young people can’t even afford to study because we have to work to not be homeless.
If the goverment taxed real estate and the bubble burst, it could then mobilize and build more housing without rich people protesting against it.
It would also be cheaper to build. I doubt cement and bricks went almost 10x in price over the last decades like houses did.
If we don’t solve this issue, the consequences will be fatal to all of western society.
One of the reason the baby boomer generation was born was because after WW2 the goverments built a ton of houses. What happened to our society?
This is general asset price inflation caused by low interest rates filtering through to housing over time. See how the yield of housing went down (rents as a proportion of house price) because low interest rates mean money moves around to chase higher yields (thus lowering them where it ends up in the process).
give it another 15 years and the problem will solve itself in most western countries