[iamnotwhoiam]

So investors buy the homes then rent them out? What’s the problem?

In some asian markets investors buy homes then sit on them unused for years. That’s a problem.

[turbinerneiter]

The problem is that it gets harder and harder for normal people to own anything (build up wealth), while building wealth is the best retirement startegy there is.

I myself, for example, live in a city where owning the place I live in is just barely getting in reach for me, although I am in the top 30% income bracket of my country. I therefore have to put my savings into the stock market, which is at an all time high. Maybe even a bubble.

It is frustrating to see any income gain that I make being absorbed by the housing market. I work hard while others get unspeakably rich just by owning stuff.

Simply put, the balance is off.

[bradleyjg]

The problem is that it gets harder and harder for normal people to own anything ( build up wealth), while building wealth is the best retirement startegy there is.

This is the problem in a nutshell! It’s impossible for houses to continue to be great “wealth building” vehicles and for them be affordable. Politicians have prioritized the former and that’s how we got where we are.

If we want affordable housing for people to live in they can’t also be the universal investment vehicle. Those two objectives are in direct contradiction.

[keewee7]

>The problem is that it gets harder and harder for normal people to own anything

One of the reasons is that people insist on living and working in some of the wealthiest and most expensive cities in the world.

I live a cheap town and my commute to work in the 2nd biggest city in my country is just 25 minutes.

[lotsofpulp]

> The problem is that it gets harder and harder for normal people to own anything (build up wealth),

In the US, it is easier than ever. Open a free account online at a number of brokerages, and buy some broad market low cost equity index ETF.

The problem is government subsidies for real estate. Get rid of federal taxpayer guaranteed mortgages (Fannie Mae, Freddie Mac, ginnie mae). Get rid of 1031 exchanges. Let the markets set the interest rate and do its own risk calculations.

See similar price distortions due to federal taxpayer guaranteed student loans.

All of this is unlikely, however, since the US and many other societies have baked in burgeoning economic growth for decades to come in their previous decades’ spending. Therefore, to avoid defaulting on these assumptions, the societies will keep inflating currency to keep the ruse going as long as possible.

[leoedin]

A lot of these investors are 50+ year olds who've benefited from tremendous unearned wealth from their primary residence.

When you own outright your main house and have paid effectively no rent or mortgage payments for decades, that surplus income makes buying a second investment property, even at today's prices, relatively easy. The extra money and demand entering the market pushes prices up.

Then the renting tenants have to pay an ever increasing share of their income in rent. They never build up capital, and so can never afford to buy anywhere.

This is a societal problem - home ownership means stability (to have children), commitment to an area, a willingness to invest time into improving it. When you can be cast on to the streets with a few months notice at your landlords whim, you have none of that.

[azeirah]

It affects the housing market very negatively. These are houses that could've been bought by families and couples and so on. Instead of being available for purchase, the same people have now have to rent instead of buy.

House prices rise, rent increases, common folk are struggling, investors are getting rich without doing anything.

It's just meh all over.

[winkelwagen]

If that means middle income families or starters are not able to buy those houses, and the investors driving the prices up. Then yes, it’s a problem.

[keewee7]

Why should middle income families be able to buy property in some of the wealthiest and most expensive cities in the world?

There is suburbs for that.

[csomar]

The problem is that in a globalized world, dutch homes are more attractive than, say, homes in Cairo or Sao Paulo. Investors moving money in means that home prices are no longer correlated with the local economy. A salary is no longer what determine the rent or the mortgage but rather "global" appeal to that place.

[Genego]

The problem is that these investors have raised rents nationally to a point where there is no affordable housing outside of social housing (8-15+ year wait lists). And this happened in a very short time period. If I'd want a 60-80m2 apartment in the city I currently live, I'd have to pay 1000-1200+ Euro for that; three to four years ago, that would have been half. Just over the border in Germany the same apartment goes for 350-500 Euros (NRW to be specific). The housing market here feels beyond crazy. Real estate prices themselves are also exploding +10%~ month over month

[iamnotwhoiam]

Is that because Germany had banned property investment or because supply keeps up with demand in Germany?

[throwaway-8c93]

The real problem is that governments around the developed world gave up on building affordable social housing since the 70s.

AirBnB investors just highlight the symptoms.

[II2II]

From my experience, the size and type of investor seem to be a factor. I have rented my entire adult life since it has some advantages (notably mobility), yet have always rented from homeowners or small-time investors. They tend to place more emphasis upon keeping their units rented and keeping good renters. Except for moving, I have only seen my rent increase once. It was a small increase and I lived in that place for many years.

Contrast that to people who have lived in places with large property managers. The rent increase is automatic, even with better renters than I. I have heard substantiated stories of rent doubling. Now those renters may have been bad apples and the property manager may have been using it as a tool for eviction, but that is still a problem. It is a problem since it is used a means to bypass tenant protections. Those protections are necessary to provide housing stability.

My apologies for the rant. In principle, I have nothing against investment. That said: the excessive greed of some investors, the ones that effectively push people down or out to achieve ... well, I don't know what some people are trying to achieve beyond a certain point ... is turning me away from that principle.

[cutler]

Market investment, ie. where little new value is added, is gambling dressed up to look respectable. It's all about getting something for nothing which is the root cause of all our economic ills.