european wide housing shortages

joe sod

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There has been alot of publicity in ireland about the shortage of housing and property price increases, however this is a europe wide phenomenon. There are housing shortages all over europe even in the worst hit countries of the recession like spain and greece. My question is why is this happening and why is it happening all over europe ?
 

joe sod

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Population increase, plain and simple. Mass migration
obviously the european financial system is also facilitating this by providing the liquidity and quantitive easing to allow people borrow the money to buy the properties. However if the demand from increasing populations is to be satisfied will the classical nature of european cities be destroyed by mega property construction and do we really want all this?
 

RETIRED2017

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I have A Daughter living in Vienna in Austria Over 50% of new Built Dwellings is for a social housing ,
My understanding is all social housing is new builds, ,so taxpayers money is used to hold prices down in austria by increasing supply,

In Ireland taxpayers money is used to buy existing dwellings for social housing pushing up Dwelling house prices in Ireland,

Price increases run at 1 to 2 % per year since she moved there in 2003 until she bought in 2008 in fact they went up slightly around the time the fell in Ireland,

She tells me there is a shortage of of Dwellings in Vienna also ,But the building of social housing is Dampening house prices,
 

dub_nerd

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Two things:
  • Lack of creditworthy developers to build new stock;
  • Existing stock bought up by foreign investors (many, many billions worth of block purchases on the PPR since its 2011 inception).
Investors will milk the rental market, while also benefitting from rising prices since 2012. People desperate to "get on the ladder" have pushed prices to the limit at the entry level end of the the under-supplied market. Eventually the investors will cash in their chips, take their capital gains, and leave the property in the hands of Irish buyers in time for the next crash.
 

AlbacoreA

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Most of Europe stopped building social housing for a few decades. Then you had a crash that effected building industry.
 

joe sod

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Folsom

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My question is why is this happening and why is it happening all over europe ?
Great question.
I would suggest it is not limited to Europe, but the US and Australia also.
Japan has been experiencing the same problem for a long time.

Increase in population generally?
That may partially explain the problem, but considering there has been an increase in population generally since the dawn of humanity, it falls short of why the issue is so pronounced in recent years.

Population increase, plain and simple. Mass migration
Population increase has been with us since the dawn of time, as has mass migration.
The USA can record the largest migration levels ever over a fifty year period from 1860's to 1910's. Rather than causing a housing shortage, it generated so much economic activity as to found the platform for the greatest economic power in the history of humankind.


Increased concentration of economic activity in cities.

Migration from rural to urban
This is a major factor. The economic crash resulted in a centralisation of financial power toward capital cities.
This is natural. Those that control the wealth exercise more power over those who create the wealth.
They typically congregate in centres of power, like capital cities.

obviously the european financial system is also facilitating this by providing the liquidity and quantitive easing to allow people borrow the money to buy the properties.
Absolutely, couldn't agree more. QE was a tool to restore asset prices to their pre-crash levels. After which, value would subsequently "trickle down" to the rest who re-generate economic activity.
Unfortunately, there is simply too much personal debt

General shortage of capital investment after the
Great Recession?
True also. The lack of investment is natural when the economic doctrine has collapsed.

In Ireland taxpayers money is used to buy existing dwellings for social housing pushing up Dwelling house prices in Ireland
This is also part of the problem.

Investors will milk the rental market
That would imply that rents are pitched at maximum obtainable rents relative to quality of service?

well if the issue is lack of supply why has it suddenly happened, why did it not happen in the 2000s, 1990s or 1980s, something else is happening, in order for ireland to solve its housing it must fully understand what is really happening
Great point.

I would suggest that what is happening in Ireland is not unique. As OP stated this issue is EU wide. I would suggest that it is US wide too.

To understand what is happening , is, in my opinion, a deliberate policy to treat housing as a commodity to buy and sell for profit.
Rather than a social provision that all people need as a necessity.
 

dub_nerd

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To understand what is happening , is, in my opinion, a deliberate policy to treat housing as a commodity to buy and sell for profit.
Rather than a social provision that all people need as a necessity.
But we have had that policy since long before the current shortage, so it seems unlikely to be the explanation.
 

Leper

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In coastal Spain (holiday resorts), there is no shortage of accommodation and nearly every road has apartments/duplexes/villas/houses for sale or repossessed. It is the same in the rural areas. In fact property was not been cheaper there since the 1990's. But, the locals can't afford to buy. The holiday home owners can't afford to sell at losses (even still) of 30% (at least) on their initial outlay in 2005. With the amount of Brits there Brexit has become a leading factor suppressing prices even after the recession. The Brits are neither buying or selling, just waiting and waiting. A few Brits are speculating though and buying at the upper end of the market in the hope of a relatively quick killing.

In major cities though, there are housing shortages. Strangely, property rentals in coastal Spain have never been dearer in the high season but still depressed in the winter/spring months.
 

galway_blow_in

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In coastal Spain (holiday resorts), there is no shortage of accommodation and nearly every road has apartments/duplexes/villas/houses for sale or repossessed. It is the same in the rural areas. In fact property was not been cheaper there since the 1990's. But, the locals can't afford to buy. The holiday home owners can't afford to sell at losses (even still) of 30% (at least) on their initial outlay in 2005. With the amount of Brits there Brexit has become a leading factor suppressing prices even after the recession. The Brits are neither buying or selling, just waiting and waiting. A few Brits are speculating though and buying at the upper end of the market in the hope of a relatively quick killing.

In major cities though, there are housing shortages. Strangely, property rentals in coastal Spain have never been dearer in the high season but still depressed in the winter/spring months.
Resort locations in Spain saw big falls during the recession this didn't happen in Madrid, Barcelona etc

Those resort locations are more fickle due to reliance on foreign visitors
 

AlbacoreA

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But we have had that policy since long before the current shortage, so it seems unlikely to be the explanation.
It has taken a long time to come to fruition. Also it's compounded by other factors. Perfect storm of policies.

For example conflicting policies of outsourcing social housing to private landlords while at the same time driving private landlords from the market.

Centralising services in the capital and allowing uncontrolled immigration when the services are unable to cope with the numbers. They are creating pressure instead of relieving it.
 

AlbacoreA

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Everyone I know who invested in property in Spain or similar or Eastern Europe has lost on it at best and many are caught in legal wrangles or scams.
 

Folsom

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But we have had that policy since long before the current shortage, so it seems unlikely to be the explanation.
True, but it also ran in tandem with local authority social housing provision.
In my view, LA budgets for housing were effectively outsourced to private developers to build social housing. When the crash came, there were no developers to build and LA house building structures were depleted.
I don't know if this is the case in other countries but I dont believe the housing crisis that is sweeping Europe and US is simply a coincidence.
 
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