Affordable mortgage or affordable housing?

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Affordable mortgage or affordable housing?

Сообщение DARPA » 01 окт 2015, 03:22

It's amazing how the liberals and communists are the same in their love to cheap money. No, I understand that the slogan "Let's print a lot of cheap money and will distribute them to the people" is very electorally attractive. This, in essence, the same "take away and divide", but not for the lumpen, and for hipsters - a kind of a simple way to market and solve all the problems.

Anticipating provocative questions, I note that I agree with some ideas of Comrade Glazyev, and I did as much as you want to be more active, our Central Bank to print money for infrastructure projects such as "The forces of Siberia." However, printing money - as well as any other strong medicine - should be used with great caution. From balm "asterisk" to get a bad lip cream.

Is it possible with the help of cheap money to make the apartment available?

Yesterday I said that it is impossible. To this I immediately got the expected objection - the invisible hand of the market, explained to me, she will make sure that apartment became more accessible and cheaper. Firstly, the cheap mortgage will reduce the percentage of profit horse that bankers are now removed from the citizens. Secondly, the builders will be able to buy profitable equipment leasing and, therefore, the cost of construction of houses has also decreased.

You will immediately find a flaw in this building?

I'll give a hint: look at our Western friends and partners, who some time ago began to pursue a policy of cheap money.

Here, for example, Sweden, the leader-monetarism. The refinancing rate in Sweden is not just close to zero - it is already in negative territory. It seems to be ideal conditions for solving the housing problem ... but for some reason it can not be solved. Prices are rising like yeast.

During the 7 years from 2000 to 2007, house prices in Sweden increased by 2.6 times - more than 30 years, from 1970 to 2000. This, of course, adjusted for inflation:

http://cornucopia-en.cornubot.se/2014/0 ... -1970.html

I quote:

http://polpred.com/?cnt=176&ns=1§or=17

The housing problem has become a priority for the authorities in Sweden
The country's budget for 2016 includes investments to improve the housing situation. In the various projects it planned to invest $ 665 million.

Sweden has long been trying to deal with the crisis in the housing market. In the apartments for rent are huge queues, and all this is compounded by the growth of housing prices in major cities of the country, according to the portal The Local.

Swedish Finance Minister Magdalena Andersson said that the government will focus on how to make more attractive the construction of rental apartments. According to her, investment in the housing sector will be the most significant in the last 20 years.
Apparently, the Swedish government is still listened to Mehmet Kaplan, the Minister for Housing, Urban Development and Information Technology. According to him, Sweden needs a long term plan for sustainable development of the housing sector. The shortage of apartments and houses threatens to further economic growth, reduces the mobility of the population and prevents the emergence of regional and international experts in the labor market. Kaplan requires the state to give greater support to local councils in the construction of affordable housing.


Somehow it does not develop the Swedes with cheap housing, right? And I'll tell you why. Explain the example of another economy cheap money of the United States.

After the US Federal Reserve lowered its key interest rate to almost zero, mortgages became available to everyone: even those who, in good conscience, and a cell phone to sell a loan would not be worth. Of course, housing prices went up.

Another factor in the growth of steel speculators. After all, if property prices are rising, this can make - take a bank loan to buy a house, to wait, when he will rise in price, and sell. Easy and intuitive earnings, where as more reliable and more profitable unpredictable real business.

At this point, the situation would be to interfere with the market. Builders in theory should have been built near a bunch of housing and meet the increased demand completely. However, in practice this does not happen - for the simple reason that the United States built about 1 million homes and apartments in the year:

http://www.golos-ameriki.ru/content/cn- ... 66717.html
http://www.fxteam.ru/forex-library/fund ... g_permits/

The total population of the United States, I remind you, is 318 million people. If we consider that the house in the US are not made to last, and that simultaneously with the construction of new homes comes the inevitable dilapidation of the old, it is clear that the market can not meet the growing demand for any year, or even 10 years.

So, housing prices went up sharply. Because of this increase in the number of Americans whose mortgages became unaffordable burden. These Americans have moved in unison on the rental market ... and rental prices also went up:

http://fritzmorgen.livejournal.com/8202 ... t405618925

As the graph shows, the percentage of home ownership fell from 69 to 64 per cent, to the lows of 1990:



Then there has been a regular in the US real estate bubble collapse, mortgage crisis in 2007, the mass eviction of mortgage borrowers from accidents cheapened their homes. Then the policy of cheap money in spite of that continued, and the bubble began to inflate again:



The invisible hand of the market, as promised liberals handle the situation. Only she did not, as we have promised on the beach and in their own way in the market. In San Francisco, people are moving en masse ... in containers. Young startups found wasteland ponastavil it was converted into a pile of improvised huts sea containers and rents them out of thousands of dollars a month:

http://www.vestifinance.ru/articles/60745

It is illegal, but that the US government is turning a blind eye to this squatter - apparently for the reason that otherwise equipped with this kind of rooming house they would have been on their own.

And why? And because before you call the invisible hand of the market to help, we should understand that it works hard and ugly. Social justice and the problems of citizens invisible hand of the market concerned in the least: she thinks only of profit, and, importantly, the income of each individual effective owner, not the profits of the entire market as a whole.

I note finally that the problem of the housing shortage can not be solved at all, "impudence", sharp and strong-willed decisions. The Soviet Union, for example, went on the way back - instead of the maximum exhort citizens to buy property, he built willing to queue and greatly complicate the life of those who are trying to buy himself personally several apartments.

However, the housing problem, as correctly pointed out a classic in the Soviet Union was no less acute than it is today - many people spent decades in the queues, and died at the ripe old age in communal, and not having received their own homes.

My grandfather, builder, electrician, a veteran labor and drummer production, was able to buy a modest odnushku only 50 years, with 10 more years, he paid for her Soviet equivalent of the mortgage and the payments, I can assure you, you do not have lungs for family budget.

To summarize

In Russia, the housing was built before the last time the Soviet rate of 70-80 million square feet. meters per year or polkvadrata per year per citizen of the Russian Federation.

Thus any attempt to blow large amounts of money in this very slow-growing pie will inevitably lead to strong growth in property prices. Heartless arithmetic, alas, do not cheat.
DARPA
 
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