zlacker

People will do literally anything over building enough housing to make everyone happy

>>JackYo+(OP)
building more devalues their assets. we are creating artificial scarcity of a basic human need because we turned it into a financial investment vehicle.

>>JackYo+(OP)
Helsinki is currently an interesting case, technically having oversupply of apartments. It's because the rising interest rates cratered the buyers' budgets -- the result is a mild downward trend in prices, definitely no crash. Building companies sit on a large supply on finished unsold apartments but steadfastly refuse to lower prices even a bit.

New construction has halted completely. Seems like the construction sector will rather hold their finished stock and wait for the demand side to pick up due to necessity (people still move in to the city), or due to interest rates eventually going down.

>>JackYo+(OP)
That would be a paradox. It's not just housing-as-investment people who would be unhappy with increasingly dense housing/population - overdevelopment can sometimes ruin your home. The difficulty in developing in desirable areas isn't just due to a minority of rich assholes protecting their investments.

>>distan+J9
Building companies don't own the apartments, banks do. Lower effective prices means writing off debt.

>>JackYo+(OP)
Spain is not the US. Barcelona had been building a lot of housing. Its not enough as they get converted to airbnbs or get scooped up by rich foreigners or foreign investment funds.

>>JackYo+(OP)
Barcelona can basically not grow horizontally anymore, being blocked in from all sides and all the ground is already covered by something.

So the alternative is to build vertically, but that also comes with trade-offs as the streets get less sun and city dwellers will be able to see less sky.

People on the internet will do anything but read before spouting their obvious solutions on the internet.

>>distan+J9
“Oversupply” is in the eye of the beholder. There’s a market clearing price for everything.

The builders can hold out for a while, but the shoe has to drop eventually. Builders only make profit when building, and if your credit is extended on old projects you can’t start new ones, hence why construction has halted.

The problem is covid. Pretty much everyone in any developed economy believes the inflation+interest rate increases will be temporary. So they’re betting inflation will go back to what it was, interest rate policy will loosen again, and people’s budgets will increase again.

I think they might be in for a very rude awakening. And not only that, housing preferences for the highest income professionals have fundamentally changed due to WFH. They could all get stuck dumping the wrong stock on a weak market all at the same time in a year or so.

>>fh973+jd
Not in Finland. Each housing complex is a separate company, and when you buy an apartment you actually buy a share in the company. Until sold to the buyers, the housing company is usually owned by the construction company. Banks of course provide funding, but the construction company is the one left holding the bag if the apartments don't sell.

>>zrn900+Ud
Real estate is only a good investment vehicle because the western world refuses to build shit. why on earth would you expect investors be enticed to buy a fundamentally depreciating asset instead of equities?

>>diggan+xe
> So the alternative is to buy vertically...

And the superblocks in Barcelona are already quite high and suffocating.

>>distan+J9
Government should build housing and sell it at a modest loss. The markets are overheated and can do with some cooling. Too bad for anyone using property values as collateral for arcane financial schemes, should have managed your risk better.

>>happyt+U9
RIP your subjective comfort, long live someone else's ability to be within 4 warm, permanent walls when the temperature drops below freezing.

>>JackYo+(OP)
People want it all:

They want cheap housing in a popular place to live, but they don't want to change the character of where they live to support housing actually being cheap.

The best they can actually get is locking the city down so the current residents are effectively lottery winners, but no one from the outside can move there.

>>pembro+Be
Indeed, it's a waiting game now. The construction companies have a valid expectation that since new construction has halted, the current supply will eventually sell, and the city will even run into a state of undersupply. Only time will tell which way that goes.

>>Tactic+Wh
The "superblocks" (superillas) in Barcelona has little to do with height. I think you're referring to just the Cerdà-designed blocks that has been around for a long time. The "superblocks" in Barcelona is about reducing the traffic running through all the blocks, but has little to do with the height of the buildings in the blocks.

>>zrn900+Ud
Lol what? Maybe back in 2007 before the crash that ruined tons of Spanish construction companies and investment in real estate. Otherwise the US builds a lot, and apparently Barcelona still doesn't build enough.