Now, if you live in the United States, Canada, or the United Kingdom, you might be wondering why you should care about the real estate market on an island in the South Pacific. The answer is that New Zealand is basically a laboratory for what happens when an entire national economy is built on the assumption that house prices will just go up forever. It turns out that trading the same increasingly expensive boarded up bungalows back and forth with your neighbours does not actually generate any real wealth. You might ask how an economy gets into this position. The answer, as is so often the case, involves politicians. (~02:00)
I haven’t heard of this guy before, and a top result when searching for his name is how he plagiarised the NYT… (not this video, a different one)
Interesting part in the middle of the video where it’s mentioned that globalisation caused everything to decrease in price, so central banks could just keep cutting interest rates without having to worry about inflation. Now that goods can’t really get any cheaper, it no longer works, and now inflation is rising and there’s no clear path to solving it other than increase interest rates and cause house prices to fall - which is political suicide.
The whole concept that rising house prices are bad for almost everyone is so easy to demonstrate, but virtually everyone is happy when their house value goes up for some reason.
Thanks for sharing. I wasn’t aware. Also, TIL Hbomberguy.
The fact that people view housing as an investment opportunity is a policy failure; there are tax incentives among other things. The system only stays afloat if there’s a constant influx of new people joining, and we all know there’s a name for it - Ponzi.
We should not tax productive things; like income and GST. We should tax unproductive things, like sitting on property extracting rent. The entire system is bass-akwards for facilitating a real economy. “Old people get all the young people’s value” is great until it breaks and everyone leaves. Then we’re left with a bunch of “rich” old people and no young talent.
There needs to be a serious shake up. This might be why TOP is polling above 5% now…
One of the ideas mentioned in this video is one from the 1800s saying that taxing income disincentivises productive work, and that we should only have a land tax (and no land improvement tax) since land itself doesn’t change and can’t hop on a plane and head to Australia.
1800s is a bit vague: Progress and Poverty was late 1800s, like 1890. Georgism was probably the least bad tax until AI happened. Now a well architected wealth tax is probably the thing that will endure.
Sorry, 1800s was a bit vague. 1879 apparently.
I would be so excited if a wealth tax was properly implemented, but given those with wealth are the ones that fund political parties I’m not keeping my hopes up.
Hope is what we have; and emailing your MP. ☺️
People often vote against their self interests. It is especialy easy to “baffle with bullshit” when it comes to the housing market.
We see this happening with scientific discourse and political discourse across the world. People just want a simple answer and science/politics/finance cant give it to them, because it always “depends”, so they defer to the people with the simple answers ( liers ).
A person is smart, we the people are pants on head retarded.
So to answer why people want their house to go up in value even though it is detrimental to society, because “Your worth just increased by $100K” is a simpler answer than “Yes your largest asset increased in value but you still need a house so if you sell you still need to buy a house that has increasd by the same amount in the same time”
The house price thing really depends how old you are. It’s only when you’re looking at downsizing that it helps you, otherwise it’s either more expensive to upgrade, or purely theoretical wealth that doesn’t help you.
Ultimately, we need to look at buying a house as locking in your cost of living, rather than an investment that only ever goes up.
Your thing is confusing until you get to: