Comment on Create a race to the bottom in the rental market
LineNoise@kbin.social 9 months ago
Housing costs, rental or purchase, are only resolved by supply and ending real estate's position as an investment vehicle.
That means large scale public housing investment to the point that it actively devalues property on a capital value bases. Rental yields are already a poor investment on their own. That leaves the "just park the money" crowd with a simple choice: sell now or watch it depreciate.
Yep. I bet my landlord is barely, if it all, breaking even on yield. Whereas I’m sitting on my arse investing in ASX: VAS getting 12%.
Why people go the lengths to get a loan, buy a flat, find a tenant, do all the maintenance and paperwork, all to get 0.1% yeild, and maybe an increase in value? I mean the last 30 years yes it would be wise, but you can’t just say it’ll be like that in the future.
Also, if I need the equity, it’s liquid, unlike houses.
IP is typically leveraged, effectively multiplying returns.
Zagorath@aussie.zone 9 months ago
Eh, I don’t agree. Supply is super important, and we definitely need to see a lot more of it. We need a doubling or tripling of the amount of government housing. We need zoning regulations to allow medium density at least in all cases. We need higher density in inner suburbs and near train stations.
But regulation protecting tenants is also useful. Vienna is probably the gold standard, with multiple different tiers of pricing regulation for different kinds of property and different needs. Other kinds of non-price regulation, like bans on no-grounds evictions, protections for tenants on quality and repairs, and rights to make minor modifications, are also important regulation. These go very well hand-in-hand with a levy like OP proposes, because the levy stops an owner from throwing up their hands and saying “I don’t want the tenant to have these rights, so I just won’t bother renting it out.”