I wrote this story. Thanks for reading. It is certainly not perfect but I hope it is useful. Would be good if our statistical authorities could read it and understand the data gaps that we face.
I really like this article is focusing on the root cause, which is employment being more and more centralized towards big cities and the snowball effect this has which makes big cities more attractive for people looking for employment. If you don’t read the whole article at least read the conclusion part, which is very illuminating.
> Worse, the statistic counts rents and mortgage interest but not mortgage repayment. A household paying €1,500 a month on a mortgage - of which €400 is interest and €1,100 is principal - shows up as spending €400 on housing. The other €1,100, the part that actually hurts, is invisible.
This guy lost me here, with the assertion that increased equity "hurts" / vanishes.
Presumably its AI slop? It's certainly a lot of charts / "effort" that have gone into analyzing some random datasets with no real revelation or conclusion.
The story is talking about the portion of your monthly budget occupied by housing. If you only "count" the interest on a mortgage payment, then you're ignoring a material amount of money out the door every month, and that would render the whole dataset questionable.
The only honest way to discuss "is housing too expensive?" is to ask "how much do you pay someone on the first of the month to live in your home or apartment?"
This can take several forms, but the majority are either:
* "My rent is $X;" or
* "My total mortgage payment, including interest and principal, is $X;" or, in some cases,
* "My total mortgage payment, including interest and principal, is $X, and I also have to pay $Y in condo fees / HOA fees / building fees."
That last category might just be an American thing; I have no idea. I just know that many if not most condo developments/buildings have an additional fee you have to pay even if you own your unit outright, and it can be significant.
> It's still money out of pocket each month, even if equity increases.
Exactly.
Building equity in this case is not a luxury, unlike what the Eurostat burden indicator thinks. Given the cost of renting, buying at very high prices is sometimes the only option to not face an even worse outcome in the future. There is simply no good option for millions of europeans.
You either pay your mortgage down or you pay your landlords down really. That part is basically even, but at least you get to own the house eventually in one case.
> This guy lost me here, with the assertion that increased equity "hurts" / vanishes.
I don’t know that the phrasing is great and it’s good to build equity as we both understand, but in terms of your monthly paycheck or ability to afford to do or buy things it seems crazy to me to only measure the interest and not the entire payment.
> Presumably its AI slop? It's certainly a lot of charts / "effort"
Even if is AI slop (and as a policy please stop insinuating something is AI slop) it’s not much worse than the torrent of dumb human only bloggers who are making asinine posts about how the AI bubble is 0vER.
In my experience with Poland the entire housing is purchased by medical doctors whose salaries had skyrocketed during covid and continue as if the pandemic still existed. That's the last thing keeping this country's economy afloat. Everyone else without real estate is hopelessly screwed. Recently even doctors having portfolio of high tens of units domestically, they start purchasing in Spain and Italy.
In Italy indeed we have a big problem, especially in touristic regions, where houses are almost always priced for non-italian citizens, there are even specialized agencies who try to sell only to non italians (I have two near my house that just focus on Germans, another close by that focus on USA citizens). This is creating a bizzarre effect where most houses in towns are effectively empty for 9-11 months per year while the people actually working and living here cannot buy anything and are forced to live with their parents even longer than the usual
It surpises me that only 6% of "the Dutch" report that housing is a financial burden. Ask anyone here and they'll all agree the housing market is fucked and everything is way too expensive.
Statistics do not always match our personal experience. But it can still be "too expensive" while way better than it is happening in Portugal, Spain and France.
yes, but there are levels to the amount of mismatch
National averages are a terrible tool. Isolated per-country indexes are insufficient. No statistic is perfect, but the European authorities could - and should - try harder.
Forgot to point that I am the author of this data story.
This is what happens when you open your country to be bought by foreign "investors", as it happened with Portugal and Americans.
When you have countries much larger and wealthier than you, they will pump the housing market to unsustainability, driving the locals out of their houses.
But hey, GDP and the waiter wages have increased, so there's that.
Americans are experiencing much of the same despite being the richest country in... history. Immigration is a not insignificant part of it but real estate being the only thing most people can finance with leverage has serious footprint as well.
Americans "are experiencing much of the same" while staying in their country. That's why many opt for the rich expat life. I've lost count of the number of stories I've read about random Americans moving to Portugal because "it's so much cheaper here" and "life is so much better".
Same goes for Europeans moving to East Asia to live the high life and causing similar problems for the locals. The only difference is that, unlike in Europe, East Asian countries have some guardrails on property ownership to avoid being overrun by foreigners. E.g. you cannot own land, and most houses are on a lease.
yeah in NL for example they have a "shortfall" of a million houses, due to overly strict regulations scaring off developers. 40% of new builds need to be social housing, and we have the strictest environmental regulation in europe. Developers prefer germany or the UK.
In the popular cities which is where everyone wants to live, it's quite low.
They've been full for quite a while, turns out land in desirable places is not infinite and there's no supply. So don't increase demand by allowing wealthy foreigners to buy out everything.
The inability to build fast mass transit is what keeps this so true. High speed rail into nearby towns could / should change the amount of land available but nobody builds it except the Chinese. And Americans don’t even consider it
That's what "full" means in practical terms. Obviously the parent doesn't mean "the entire city is a contiguous matrix of one-cubic-meter boxes, each with a person inside". People will have different opinions on whether it's "full", of course, based on how much they are willing to fundamentally alter the location (and its desirability).
> So don't increase demand by allowing wealthy foreigners to buy out everything.
I’m not sure about the effect of “wealthy foreigners” since if they are wealthy they are probably competing for more expensive properties that your school teacher or grocery store worker aren’t.
But you’re on to something here which isn’t being addressed which is the effect of mass migration to some of these countries. Obviously the migrant workers too want to and gravitate toward the cities with the most jobs, which would place additional pressure on housing prices since they join an already hyper competitive pool of buyers.
I wrote this story. Thanks for reading. It is certainly not perfect but I hope it is useful. Would be good if our statistical authorities could read it and understand the data gaps that we face.
I really like this article is focusing on the root cause, which is employment being more and more centralized towards big cities and the snowball effect this has which makes big cities more attractive for people looking for employment. If you don’t read the whole article at least read the conclusion part, which is very illuminating.
Which llm was this generated with?
Land Value Tax solves this
> Worse, the statistic counts rents and mortgage interest but not mortgage repayment. A household paying €1,500 a month on a mortgage - of which €400 is interest and €1,100 is principal - shows up as spending €400 on housing. The other €1,100, the part that actually hurts, is invisible.
This guy lost me here, with the assertion that increased equity "hurts" / vanishes.
Presumably its AI slop? It's certainly a lot of charts / "effort" that have gone into analyzing some random datasets with no real revelation or conclusion.
Not sure what is confusing you.
The story is talking about the portion of your monthly budget occupied by housing. If you only "count" the interest on a mortgage payment, then you're ignoring a material amount of money out the door every month, and that would render the whole dataset questionable.
The only honest way to discuss "is housing too expensive?" is to ask "how much do you pay someone on the first of the month to live in your home or apartment?"
This can take several forms, but the majority are either:
* "My rent is $X;" or * "My total mortgage payment, including interest and principal, is $X;" or, in some cases, * "My total mortgage payment, including interest and principal, is $X, and I also have to pay $Y in condo fees / HOA fees / building fees."
That last category might just be an American thing; I have no idea. I just know that many if not most condo developments/buildings have an additional fee you have to pay even if you own your unit outright, and it can be significant.
> The other €1,100, the part that actually hurts, is invisible.
It's still money out of pocket each month, even if equity increases. I assume it "actually hurts" because it's the majority of the payment.
> It's still money out of pocket each month, even if equity increases.
Exactly.
Building equity in this case is not a luxury, unlike what the Eurostat burden indicator thinks. Given the cost of renting, buying at very high prices is sometimes the only option to not face an even worse outcome in the future. There is simply no good option for millions of europeans.
You either pay your mortgage down or you pay your landlords down really. That part is basically even, but at least you get to own the house eventually in one case.
> This guy lost me here, with the assertion that increased equity "hurts" / vanishes.
I don’t know that the phrasing is great and it’s good to build equity as we both understand, but in terms of your monthly paycheck or ability to afford to do or buy things it seems crazy to me to only measure the interest and not the entire payment.
> Presumably its AI slop? It's certainly a lot of charts / "effort"
Even if is AI slop (and as a policy please stop insinuating something is AI slop) it’s not much worse than the torrent of dumb human only bloggers who are making asinine posts about how the AI bubble is 0vER.
In my experience with Poland the entire housing is purchased by medical doctors whose salaries had skyrocketed during covid and continue as if the pandemic still existed. That's the last thing keeping this country's economy afloat. Everyone else without real estate is hopelessly screwed. Recently even doctors having portfolio of high tens of units domestically, they start purchasing in Spain and Italy.
In Italy indeed we have a big problem, especially in touristic regions, where houses are almost always priced for non-italian citizens, there are even specialized agencies who try to sell only to non italians (I have two near my house that just focus on Germans, another close by that focus on USA citizens). This is creating a bizzarre effect where most houses in towns are effectively empty for 9-11 months per year while the people actually working and living here cannot buy anything and are forced to live with their parents even longer than the usual
It surpises me that only 6% of "the Dutch" report that housing is a financial burden. Ask anyone here and they'll all agree the housing market is fucked and everything is way too expensive.
Statistics do not always match our personal experience. But it can still be "too expensive" while way better than it is happening in Portugal, Spain and France.
> Statistics do not always match our personal experience.
They also often don’t match reality either.
> They also often don’t match reality either.
yes, but there are levels to the amount of mismatch
National averages are a terrible tool. Isolated per-country indexes are insufficient. No statistic is perfect, but the European authorities could - and should - try harder.
Forgot to point that I am the author of this data story.
This is what happens when you open your country to be bought by foreign "investors", as it happened with Portugal and Americans.
When you have countries much larger and wealthier than you, they will pump the housing market to unsustainability, driving the locals out of their houses.
But hey, GDP and the waiter wages have increased, so there's that.
Americans are experiencing much of the same despite being the richest country in... history. Immigration is a not insignificant part of it but real estate being the only thing most people can finance with leverage has serious footprint as well.
Americans "are experiencing much of the same" while staying in their country. That's why many opt for the rich expat life. I've lost count of the number of stories I've read about random Americans moving to Portugal because "it's so much cheaper here" and "life is so much better".
Same goes for Europeans moving to East Asia to live the high life and causing similar problems for the locals. The only difference is that, unlike in Europe, East Asian countries have some guardrails on property ownership to avoid being overrun by foreigners. E.g. you cannot own land, and most houses are on a lease.
It seems like you haven't read the article at all.
Hmmm how does the rate of new home/apartment builds look?
yeah in NL for example they have a "shortfall" of a million houses, due to overly strict regulations scaring off developers. 40% of new builds need to be social housing, and we have the strictest environmental regulation in europe. Developers prefer germany or the UK.
In the popular cities which is where everyone wants to live, it's quite low.
They've been full for quite a while, turns out land in desirable places is not infinite and there's no supply. So don't increase demand by allowing wealthy foreigners to buy out everything.
The inability to build fast mass transit is what keeps this so true. High speed rail into nearby towns could / should change the amount of land available but nobody builds it except the Chinese. And Americans don’t even consider it
They're not full, people just aren't willing to increase density so the only option is an ever larger sprawl of houses rather than apartment blocks.
That's what "full" means in practical terms. Obviously the parent doesn't mean "the entire city is a contiguous matrix of one-cubic-meter boxes, each with a person inside". People will have different opinions on whether it's "full", of course, based on how much they are willing to fundamentally alter the location (and its desirability).
> So don't increase demand by allowing wealthy foreigners to buy out everything.
I’m not sure about the effect of “wealthy foreigners” since if they are wealthy they are probably competing for more expensive properties that your school teacher or grocery store worker aren’t.
But you’re on to something here which isn’t being addressed which is the effect of mass migration to some of these countries. Obviously the migrant workers too want to and gravitate toward the cities with the most jobs, which would place additional pressure on housing prices since they join an already hyper competitive pool of buyers.