patrick.net

astrid,

Absolutely! There was a time when subsidizing housing may have made sense. Homesteading and all that. But I don't see any lack of building and there appear to be 3.8 million homes we can't find occupants for now!

The lure of easy, tax free money trumps fear EVERY TIME! People, this is like finding $500,000 on the sidewalk. Not a 500K bonus. Not a 500K stock option. Not a 500K “raise”. All of those would be taxable events. This “thing” is like having the ability to lead a double life, one as a responsible employee and tax payer and another as a drug dealer. Who could resist that kind of excitement?

So what's the history of this 'property as a money factory for the average schmo' phenomenon? In other words, why does it go in booms and busts, rather than being a perennial theme? Is it just low interest rates that spark it? Liberalised credit? Now it's the same interest rate for investment property vs owner occupying? (Used to be higher.) Otherwise, we would have seen this occurring decades ago, and it would have run its natural course, whatever that is. e.g. there was a housing crisis just before the Great Depression. World wars serve as a distraction and boost the economy in other ways.

I get e-mails from a guy who tries to get people to buy multiple investment properties, and keeps pushing the 'capital growth forever', 'you'll die poor if you don't do this', 'the government wants you to be self-sufficient' line to encourage people to plough every cent of equity they have into more investment properties -- maybe they will lose money, maybe they won't -- the point is, what if it works? What if a handful of people end up owning every spare piece of residential property in a giant snowball effect? Where the idea of owning and occupying just becomes a fond memory for most, as half the population worked out they could fix prices and draw down from equity and control housing supply to actively prevent the other half from ever owning. Why? To get rich. How? Cos they worked it out first.

But this time there's no more world wars to distract people, no more 'New Deal' initiatives to provide affordable housing...

(I know there's a new topic, but it's a little too economically abstract for me...)

@surfer-x:
I like you fine!
Now, I have to ask, how did you know I'm slim??? :)

Hmmm...well I guess you could assume so, because I'm obviously a renter who is sacrificing his food intake in order to save 100K for a 2% down payment on a san hosebag $hitbox. :D

sacrificing his food intake in order to save 100K for a 2% down payment on a san hosebag $hitbox.

I feel your pain, have you considered giving up? It has worked wonders for my attitude. ;)

"...have you considered giving up?"

Actually I have! It's quite euphoric knowing I can rent & save money at a reasonable pace (even w/only 0.5*HaHa salary) and make smart investments...and maybe someday make a purchase when reason has returned to the market.
Until then, I enjoy the proximity to the surf (Manresa was excellent yesterday, though there were some nasty currents) and to the snow, that I am allowed as a humble renter is san hosebag....

though there were some nasty current

Always the case there, I generally do not like beachbreaks. Too peaky and too much current. Give me a nice reef, reef pass or point any day. Remember to put your body perpendicular to the beach when caught in rip. I almost went to china once while surfing manresa.