Totally anecdotal, but I live in the largest city in Spain, and even in my residential area (as opposed to the touristy spots) every week I can see ads for "we buy your house, paid upfront over market value, Chinese investors".

Posters in walls, flyers in windshields and so on.

> every week I can see ads for "we buy your house, paid upfront over market value, Chinese investors"

It specifically calls out the fact that they're Chinese? Are you sure this isn't a political stunt?

Yes, it literally says Chinese investor.I guess it's to make the idea of buying immediately a flat with cash sound less shady.

I have no idea of the reasoning why specifically Chinese people invest in Spanish real state paying with cash, it's just what I see.

>Are you sure this isn't a political stunt?

It's our president's whole thing to take measures that sorta move the needle in a good direction but are focused on being good moves politically. My guess is he needs to act against rent prices, he can't go after the big guys (blackrock, etc) for fear of retribution and he can't go after the regular joe that buys a second house as investment. Foreign investors don't vote, so they're the next best option.

This is excellent, assets like property don't grow on trees and needs to be protected from foreign investors.

Absolutely need something like this in the UK.

The UK first needs the will to do something. The UK is renowned for shell company purchases and laundering. What is wanted by the little home buyers is very different from what is wanted at the top of the pyramid. As the current uproar about the decades long grooming atrocity has shown the rot runs deep.

I think the ship has sailed, but regardless isn't it all meaningless? Surely they can setup a company to get around it, or will be ban all foreign ownership of shares too?

Land is a public good, insofar as "buying" the land still comes with obligations to the state (paying taxes, conforming to building codes and zoning regulation, etc). Just because you "own" it doesn't actually mean you can do as you please.

Given all of that, it is not unreasonable to limit or outright prohibit foreign ownership of land, or ownership of land by companies which are not majority-locally controlled.

It's interesting, I just think the second order effects might be a bit scary.

Having said that I guess for FDI there's always the option of getting a local company to "JV" with like in China.

Assets cant be shipped overseas. They are here, in the UK. That's the beauty of it. Taxes can force them back to UK ownership.

The rich are buying the only asset the middle class will ever probably own, housing.

Do you think it is bad when foreign investment corporations buy commercial property? This is very common in London. Or only residential property? And, were you upset when foreign capital (Malaysian, mostly) helped to redevelop Battersea Power Station?

Meaningful is a weasel word here. Even 0.1% price increase which would be impossible to measure directly still adds up across the entire housing sector.

But, equally important is simply the number of natives prevented from buying the home they want because someone is getting a vacation property.

But you also need to measure the dampening impact on home building.

If builders would have built N units knowing they could easily sell some % them to foreign buyers but now they can’t, then you might lose the whole supply. And all the knock on effects for contractors, suppliers, etc

Cities are rarely constrained by the willingness of someone to build housing, it’s generally more an issue of being allowed to build housing.

For the most extreme example just look at San Francisco here in the US, where the average number of legally-allowed new housing units is currently around 3.5 total per month (https://sfstandard.com/2024/04/08/san-francisco-new-housing-...) in a city of 873,000 people.

Cities typically don’t have draconian taxes on real estate.

~0.1% of real estate. If the major concern is these rules change nothing then that applies to both upsides and downsides.

No the issue with activities that constrain supply is that they might constrain more supply than the explicit units impacted by the policy.

This very slightly constrains demand not supply.

At most the knock on effects might impacts supply, but that’s up to the market to decide.

The impact on the market is precisely the concern. I’ve not seen any studies that show how taxing market participants differently impacts the supply in real estate. So I don’t have strong convictions one way or the other. But you can craft a narrative that foreign buyers are higher margin customers so drive builders to create at higher then their participation rate.

But more generally if you want more of something, generally I’m suspicious of efforts that make that thing more expensive.

You’re simply ignoring scale here.

Having what in practice is probably 1 in ~5,000 fewer customers has negligible impact on a housing market. That’s assuming many foreigners who would be buying a 3rd home will probably substitute longer term rentals but it’s not zero and from the perspective of customers any movement is positive here.

Pedantic nit: dampening is to wet, damping is to subdue oscillations.

I think I read 20,000,000 need housing and this will impact 20,000 per year so broadly the numbers are inline.

How can 20M be even remotely correct? Spain has a total population of about 48M.

Yeah, you have 0.1% of a house, sure. But do that across a thousand houses and you have 100% of the houses. It's that simple.

500$ on a 500k house might not seem like a big deal, but I’d still rather have the 500$.

Depending on the market, market prices can be decided by a very small number of transactions that set things. Probably true for houses in Spain (limited supply) and foreign wealthy buyers (very high potential demand)

Of course, it's just more demand, like immigration, aging population and so on. Of course those are a much more difficult target..

Even if it does, I don't see why it really matters. Cost of living has nothing to do with the value of the land you live on. Maybe the real problem is foreign investors leave the property vacant?

What's causing it in the US?

New development was made illegal in the places people want to live.

It's that simple.

Now, you may agree with the given reasons for making that development illegal (and/or very expensive), or you may not, but that is the undeniable end result of those policies. We made that bed, now we lay in it; we could theoretically un-make that bed overnight, but there's serious money (and political power) riding on making sure this problem never goes away.

It’s always supply. It’s fair to criticize foreign ownership/hedge funds purchasing homes, but the overwhelming reason is that we are not building enough.

Sure, but it's one thing to not be building enough for people to live in, and another thing to not be building enough for people to keep empty flats as speculation vehicles.

How many % of flats are empty? At least in the US the hottest housing markets usually have the lowest vacancy rates. This makes sense, because the opportunity costs for leaving a property empty is higher, so owners are more tempted to rent them out.

The vacancy rates are deceiving though. If you have a place that is owned by someone and they are paying taxes on it, and it's not listed as a rental, it's not considered vacant.

In big cities there are definitely homes that are empty and not listed being used as a store of wealth. In fact just within view of my own home are two houses like that. Both owned by foreign families who wanted a safer place to keep their wealth than their own country (China and India respectively).

So let the people build enough to make houses being stores of wealth useless rather than engage in more govt control.

>The vacancy rates are deceiving though. If you have a place that is owned by someone and they are paying taxes on it, and it's not listed as a rental, it's not considered vacant.

Why would you lie like that?

https://www.census.gov/housing/hvs/definitions.pdf

Occupied Housing Units. A housing unit is occupied if a person or group of persons is living in it at the time of the interview or if the occupants are only temporarily absent, as for example, on vacation. The persons living in the unit must consider it their usual place of residence or have no usual place of residence elsewhere. The count of occupied housing units is the same as the count of households

Vacant Housing Units. A housing unit is vacant if no one is living in it at the time of the interview, unless its occupants are only temporarily absent. In addition, a vacant unit may be one which is entirely occupied by persons who have a usual residence elsewhere. New units not yet occupied are classified as vacant housing units if construction has reached a point where all exterior windows and doors are installed and final usable floors are in place. Vacant units are excluded if they are exposed to the elements, that is, if the roof, walls, windows, or doors no longer protect the interior from the elements, or if there is positive evidence (such as a sign on the house or block) that the unit is to be demolished or is condemned. Also excluded are quarters being used entirely for nonresidential purposes, such as a store or an office, or quarters used for the storage of business supplies or inventory, machinery, or agricultural products. Vacant sleeping rooms in lodging houses, transient accommodations, barracks, and other quarters not defined as housing units are not included in the statistics in this report. (See section on "Housing Unit.")

That happens once every 10 years. They use tax records and other records to estimate it otherwise.

Also people will just not return the form, and once again they have to estimate.

And in places that impose a vacancy tax, they have incentive to lie or deceive the housing authority to avoid the tax.

And in my neighbors case for example they come by once every few months to pick up mail and probably fill out those types of forms.

In reality there are a lot of vacant homes that aren't counted as vacant.

>That happens once every 10 years. They use tax records and other records to estimate it otherwise.

Good thing we did a census in 2020, and the housing crisis (and associated allegations about absentee owners) far predates that.

>Also people will just not return the form, and once again they have to estimate.

Apparently they're pretty persistent. If you don't fill out a form you'll eventually get an enumerator that shows up at your door.

>And in places that impose a vacancy tax, they have incentive to lie or deceive the housing authority to avoid the tax.

The housing authority is independent from the census bureau. Is there any evidence they share data?

>And in my neighbors case for example they come by once every few months to pick up mail and probably fill out those types of forms.

So they're willing to go out of their way and lie to the federal government in order to maybe move the lower the vacancy rate by 0.00001%, when many (most?) people (as evidenced by this thread) are going off vibes and likely won't care anyways? I didn't know that foreign vacant homeowners had such a tight knit cabal.

I think it's really important to press people on this point, because "vacant homes as an investment vehicle" gets trotted out as a thought-killing cliche.

Surely there are some pied-a-terre and vacant investment properties, but vacant rental housing in NYC for example was 1.4% in 2023. I'm not sure how they measure this, but even if you doubled the amount of available rental housing, it would still be an insanely hot rental market.

Places that have stable or decreasing housing prices (NoLa, Austin) have over 10% of rentals vacant.

I still have seen no evidence that VC-backed purchases are having any noticeable impact on the US housing market except possibly in 2 or 3 specific locales (and quite restricted ones at that).

So, whatcha got?

Well, the US could build ten thousand Burj Khalifas and the property tax from that would sustain Medicare for All.

When too many flats are used as speculation vehicles, the bubble pops and the problem solves itself.

Except at that point the wealthy homeowners will ask for bailouts.

If they want to pay lots of property taxes and contribute to payments for local infrastructure without actually using it, that’s probably a net good thing, IF there were enough additional homes to go around for others.

The return on property is too good to pass up to an investor. This is a step in the right direction and need something like this in the UK.

however, like roads, it is entirely possible that building more in desirable neighborhoods simply leads to more wealthy people having more options for which (otherwise empty) residence they choose to spend the weekend at.

Decades of public support for treating housing as an investment shaping zoning and other related policies, the relative profitability of constructing budget vs luxury housing, and more recently, inflationary monetary policy,

Same reason gold increases in $ value just by existing or people passively invest in S&P500. New money is created and it has to settle somewhere. There's plenty of cheap land or land that barely moves in value, but the desirable spots in cities are limited, so that's a natural place to invest.

Limited yes, but limited by regulation more than anything else. Within a 30 minute drive of SF there are hundreds of square miles to develop on. Pick a dozen at random and build residential skyscrapers. Problem solved.

That's pretty much what they're doing. But the apartment that probably requires driving 30 minutes (or 1.5hr train) to work is worth a lot less than something in SF.

Edit: SF itself does have strict zoning. But even if everyone there wanted max density, so they tore everything down and built skyscrapers instead (ignoring the soil problem there), it's a fixed supply of land.

Yeah I’m seeing some of the development but it’s mostly 5 story rather than 50, and very small total area compared to what would be possible.

The apartments are still quite expensive even an hour’s train ride away.

I wonder if it has something to do with advance economies growing at 1%-2% a year while the least developed countries are growing at 4% - 5%?

This would cause the demand for building materials to skyrocket as billions of people can enter the market to purchase lumber, steel, and energy who 10 years ago couldn't.

A housing bust in 2008 washed a lot of capital and talent out of the house construction industry, and the current boom is hard to supply with construction capacity even when there is land to build on. And also, even if the land exists, there is already a SFH on it that needs to be torn down, so we are densifying at a slower rate than we need to. Couple that with an even increasing focus of good job opportunities into a few hot metros, the whole US housing market becomes one hot mess.

There are robotic construction companies like FBR, and plenty of open stretches of land along highway 101, 680, 880, etc.

There is a lot of cheap housing in the south and Midwest as well, but it isn’t very relevant since people are picky about where they want to live.

In Canada potentially Chinese immigrants in Vancouver/Toronto, in the US it's an over-generous monetary policy (through low interest rates, especially during COVID)

Seems Canada has a similar money-printing MO as the US. CAD money supply doubled in the past decade.

they've slashed immigration, so I guess we'll find out. BC is also going to tax any sales after less than 2 years of ownership; I'm doubtful this will increase affordability or supply, but it will essentially kill the economic model of renovation & flipping.

I don't think it will kill "reno and flip" market. It will become "reno and rent-to-buy later", or "reno, hold and sell".

One should also add that (at least in Canada) newer buildings are not built for families but for investors. Who needs all of those 30 square meter studios?

in Canada, like in the US, it's a lack of supply mostly because of draconian zoning and land-use policies. Chinese immigrants are NOT the primary cause of housing cost inflation, and are likely not even in the top 10 causes.

I don't know or claim that it's any truer, but I thought the oft-reported reason, for Vancouver/BC especially, was Chinese investment, and explicitly not immigration even, the chief complaint that the growth has been/is expected to be such that they're left unoccupied?

This is my experience. The two houses that I share a backyard fence with are empty. A caretaker comes by once a month to have a look around one of the houses but otherwise they're unoccupied.

>for Vancouver/BC especially

The ALR bans any and all significant development in BC.

Land is not scarce in BC; land that it's legal to build on is.

Ok - I'm not Canadian, idk what ALR is - I'm just saying what's disagreed with up-thread isn't what, in my experience, is the common claim (whether it's correct or not).

The Agricultural Land Reserve prohibits farmland from being sold for housing development. It's one of the oldest modern NIMBY policies.

Most of the land in BC is classified in this way.

Well that's not obviously bad I don't think? If Canadians want to be mad about pro-farm regulation, they should look to dairy; milk tokens, cheese availability, etc.

Are you saying prices didn't go up because of Chinese investors, or Chinese immigrants? I haven't heard anyone discussing immigration as a root cause

Too much regulation or greedy landlords depending on your political persuasion.

There's never been a time when people were not greedy.

The "suddenly, people started being greedy" meme doesn't make much sense.

Nah. There was this time when egg farms got greedy and raised the price. Then they became not greedy again and it's fine. Similar situation with software engineers. They got greedy and salaries went up. When they become less greedy, like rights now, things go down a little.

People have indeed always been greedy, but the greediest are becoming more wealthy and powerful by the day.

The point of the comment was not to present a full description of either position. It was to point out that everybody here is just going to reflexively provide their partisan answers to this question.

NIMBYism making it extremely difficult and expensive to build supply as is needed.

in 1946 the US had a population of 141M and built 700k housing units

in 2024 the US had a population of 336M and built 90k housing units

Where are these numbers from? How does 5 million housing units from 2020-2023 (this was published in 2024) translate into "90K housing units"

>The United States has added almost 5 million housing units since 2020, most heavily in the South and most of them single-family homes, making a housing shortage look conquerable in much of the nation.

https://washingtonstatestandard.com/2024/05/16/housing-boom-....

Parent used a single month’s count for the whole year

> in 1946 the US had a population of 141M and built 700k housing units

I think the year after the second world war ended at which point marriages, and therefore household formation, went to unprecedented levels introduces a lot of noise into that signal

1946 was a special case. It was the start of the baby boom, kicked off by the victorious soldiers returning home and wanting to get on with life.

> in 2024 the US had a population of 336M and built 90k housing units

That was one month’s worth. There were ~1.5 million built in 2024 in the US.

https://www.census.gov/construction/nrc/pdf/newresconst.pdf

"NIMBYism making it extremely difficult and expensive to build supply as is needed."

Only in some areas. There are other factors affecting how expensive houses are across the country, such as materials/labor, preferences for larger/fancier houses, location preference, and increasingly complex/expensive code.

> preferences for larger/fancier houses

And more space per person, so older houses now house far fewer than they used to. US has more bedrooms without an occupant than ever.

https://www.nytimes.com/2025/01/09/realestate/empty-bedrooms...

I wonder how empty-nesting attributes to this. My parents have 3 empty (really, repurposed) bedrooms in their house now. But downsizing in their area wouldn’t actually help financially, so they don’t.

Empty-nesting has been a thing for about 2-3 generations. Before that there were often multi-generation homes. But it seems like people didn't really up-size 2-3 generations ago. Many of the great generation were happy to build their 1000sqft Sears house and live there the rest of their lives. The last 1-2 generations seems to be more of a drive for trading up to bigger and better everything. Now we see empty-nesters in 2500sqft houses. I think it's natural to not not want to leave a long-time home, even if it is oversized and only filled on holidays for company or parties. But why do we really need that much space in the first place, seems to be more of the question.

In my case, most elderly relatives own their largest homes ever for when kids visit. So many bedrooms have never had a full time occupant.

Idk if the article says this (paywall), but: Home ownership is basically subsidized in the US. So to take full advantage of that, someone may want to buy the most expensive house they can afford in the place they want to live. If it has extra bedrooms, so be it.

Your 90K number is a monthly number, not annual and only for single family units.

https://fred.stlouisfed.org/series/HOUST1F

It's also a delta being put alongside the absolute US population

Do you need specific evidence that additional demand causes price increase when the supply is pretty much fixed?

For the last years we’ve had 500K immigrants coming every year. That’s what’s causing inflation.

Printing massive amounts of money is what caused the inflation.

I was talking about housing inflation specifically. Housing has increased in price more than the rest of goods plus it’s been increasing in price for a long time, long before covid.

Adding millions of people and not building anything makes housing prices skyrocket. One of the two needs to be dealt with and, since immigration also makes salaries plummet for the most vulnerable, why not kill two birds with one stone.

In my hometown, Palma, in Mallorca, I live in a street where 50% of houses are owned by foreign people or investors/airbnb. The neighborhood is not 50% but not that low.

The problem? Prices skyrocketed, like a 10x in 10 years (for big houses, small houses 4x). I hear more english/german/sweedish than spanish (or catalan) in my dog walks.

Besides economic implications (a lot for local people trying to find places to live), there are cultural/social implications. The neighborhood used to be a community, where people were open to help and share. Now this is changing and evolving into an individualist neighborhood.

Our oficial language is being minoritized even more. This doesn't seem like the neighborhood we used to live on.

Not everything is economy. The intangible heritage is something we should take care more.