Re:The Shock of Sweden's Housing Market Is Hitting the Count...
by bogomipz on Thursday November 16, 2017 @10:38AM
(#15713497)
>'The main way to increase home prices is to make the monthly payments lower than before, by either decreasing interest rates or extending the maximum mortgage loan length"
>"Regarding tax, if you let interest be deductible from your taxes, you are making mortgage payments even lower. Again, this raises home value because mortgage payments will again revert to what they were before."
But these two policies/practices also allow more people to become homeowners and part of the "landed gentry." Isn't this acceleration of home values a side effect of encouraging home ownership rather than a strategic attempt by the segment of homeowners to keep other's out? I think you are making this side effect out to be something conspiratorial and I just don't believe there is any such unified home-owner voting block.
Homeowners essentially hold everyone else hostage because they are able to vote and youth/the unborn/many immigrants cannot. So politicians are highly incentivized to pass policies that increase home values. Of course, not everyone who can vote is a homeowner, but politicians and wealthy/connected people disproportionately are.
The main way to increase home prices is to make the monthly payments lower than before, by either decreasing interest rates or extending the maximum mortgage loan length. In another one of my posts, I explained why this will actually simply raise the values of the homes without affecting mortgage payments very much. This has the added effect of pricing a lot of people out of home ownership compared to the previous market, because this does increase the down payments that you need to make. Thus the increase in rents.
Regarding tax, if you let interest be deductible from your taxes, you are making mortgage payments even lower. Again, this raises home value because mortgage payments will again revert to what they were before.