Manufacturers are not off the hook. If they are not reliable then the expected runtime is low and their monthly payments go up.
If you’re a manufacturer and you’re not sure whether your product can last 10 years then you’re free to contact an insurer and hash something out with them. Still, the buck stops with the manufacturer everything else is pointless bureaucracy. Shit broke? Manufacturer is on the hook, replace it. Simple as that. Not “customer now has to deal with a bank and the manufacturer and a rating agency”.
However we should prepare ourselves to prevent the appliance market to become like the housing market.
I don’t see much speculative capital flowing into home appliance rentals and turning regular home appliance rentals into short-term high-profit rentals.
There’s not even an oversupply of luxury appliances at the expense of reasonably-priced ones.
Quite literally nothing about the housing market issue has anything to do with what’s going on on the home appliance one, or with overregulation. Sure, in places there’s regulations to re-think or even straight abolish, e.g. parking minimums, but generally building codes don’t make stuff more expensive. Least of all on a macroeconomic level. The issue, for a long time, were ROI expectations of investors. It’s a general problem in the economy: Too many rich fucks with too much money, not knowing what to do with it, where to invest it, but still wanting their 8% because… why. They’re already filthily rich. I totally get a starving artist rent-seeking, “then I can let go of my day job and focus on my art”, but a billionaire? Get the fuck out of here.
The main bottleneck for the housing market is land in areas where people want to live. People have to pay whatever they can to live close to their work. If demand is so big, of course only housing with the highest margins is developed, which is the luxery market.
The speculative capital is flowing because the high demand keeps prices stable. If there would be a surplus to the point that the speculative capital doesn’t find a buyer when selling, prices would be much lower.
The backing for the high prices are the real tenants though who want to live where they work.
Appliances don’t need the speculative capital to become expensive. It is enough if there is less competition. Then customers can’t ‘move’ to other products and have to pay whatever is demanded.
If the requirements stay limited to an extended warranty then things can remain competitive but I doubt that the regulations will end there. This should take cheap Chinese brands off the market that don’t have a support network in Europe. That’s good for nature, but it removes the cheap options off the market which will allow the market to rise the prices for the cheapest durable goods.
If demand is so big, of course only housing with the highest margins is developed, which is the luxery market.
BS. There’s no market for overpriced accommodation which developers finally understood so they’re dialling it down. Took them long enough.
If there would be a surplus to the point that the speculative capital doesn’t find a buyer when selling, prices would be much lower.
It’s not about not finding a buyer. It’s about finding a buyer that meets their ROI demands, otherwise they’re happy to just let properties sit idle. That’s the “speculation” part.
Again, the solution is regulation in the form of taxing vacant property. Can’t find a tenant, you say? City will be happy to provide you with one, straight off the top of the waiting list for social housing. Not the price range you want to rent for? Well, then you can pay taxes until you think otherwise.
In the end, money is power. If you don’t want all the power to end up with whoever happens to have money you gotta stomp people with money at some point or the other. When they whine, tell them they should become better business people, not invest in such stupid schemes as trying to turn a working class neighbourhood into accommodation for billionaires.
This should take cheap Chinese brands off the market that don’t have a support network in Europe.
Turkish, more like, China isn’t really in the market here and Beko rules the low end. Still, two years warranty instead of the one year that’s the legal minimum.
And honestly, 120 Euro fridges turning into 150 Euros fridges would be a good thing. Building things in a solid way is a different thing than blinging it out: Don’t push designers to get rid of the fourth bolt for the attachment plate, don’t save fifty cents by buying cheap lubricant, penny pinching is a disease. May increase GDP in the broken window way but who the hell wants that.
A surplus in supply would threaten them with an infinite time to wait for their target ROI.
the solution is regulation in the form of taxing vacant property
fully agree
If you don’t want all the power to end up with whoever happens to have money you gotta stomp people with money at some point or the other
Fiat currency. Public banks can hand out credits to whomever wants to build with a solid calculation.
If you don’t want all the power to end up with whoever happens to have money you gotta stomp people with money at some point or the other
You tax them. Of course only possible if the masses are not manipulated. Drones and AI, stomping would only be possible for something like 5 more years. Afterwards there is not much more power left.
120 Euro fridges turning into 150 Euros fridges
More like 120 Euro fridges leave the market and 150 Euro fridges cost 200 Euros.
Building things in a solid way is a different thing than blinging it out: Don’t push designers to get rid of the fourth bolt for the attachment plate, don’t save fifty cents by buying cheap lubricant
I want to live in a society where people choose the solid products on their own. Everything else calls for trouble down the line.
May increase GDP in the broken window way but who the hell wants that.
A surplus in supply would threaten them with an infinite time to wait for their target ROI.
Dindingding winner winner chicken dinner. That’s exactly what’s happening. Question still being why such stuff should be allowed in the first place, why should ordinary folks have trouble getting apartments just so that some rich fucks can try to make profit.
Fiat currency. Public banks can hand out credits to whomever wants to build with a solid calculation.
You can’t just print money because inflation. That said, yes, public banks are absolutely able and willing and happy to invest in housing projects. It’s how e.g. these folks get much of their money. Things get difficult though when there’s speculators throwing money around, artificially increasing property, land, and construction prices. Public and cooperative banks are generally happy if your project earns enough rent to finance their fixed-term deposit rates but with inflated costs earning that rate means inflating rents and then you again might be out of people who can afford it.
Side note the mortgages on multiple flat type properties don’t tend to get paid down, ever: By the time the mortgage matured it’s time to renovate the thing, and you roll it over into a new one. Still the rent prices you can achieve with that are nothing like you see on the open market.
I want to live in a society where people choose the solid products on their own. Everything else calls for trouble down the line.
It is irrational to expect rational behaviour from people.
why such stuff should be allowed in the first place,
Because we have a market economy. We can switch to planning, but that has its own disadvantages
why should ordinary folks have trouble getting apartments just so that some rich fucks can try to make profit.
They should not. It’s market manipulation that we don’t have enough apartments. With different zoning laws or more plots to built, there would be enough apartments.
speculators throwing money around, artificially increasing property, land, and construction prices.
Tax empty housing, or housing in general, and speculation will disappear.
Still the rent prices you can achieve with that are nothing like you see on the open market.
In which way? Why are those apartments not on the open market?
It is irrational to expect rational behaviour from people.
That’s also why people shouldn’t be forced to be rational. The Sovjet Union was forcing people to be rational but people weren’t happy.
Because we have a market economy. We can switch to planning, but that has its own disadvantages
Planned economy is not when there are regulations.
They should not. It’s market manipulation that we don’t have enough apartments.
“Manipulation” implies intent to achieve that state of affairs, and, no, that wasn’t the goal of capital. Capital wanted ROI and looked for it in the wrong place.
With different zoning laws or more plots to built, there would be enough apartments.
In the US, yes. Europe by and large doesn’t have such inane laws.
In which way? Why are those apartments not on the open market?
The syndicate – did you read the link I gave you – specifically works towards removing properties from the market, get all control into the hands of the tenants. Rents pay for the mortgage, that’s it, no middleman, and the legal structure ensures that tenants can’t band up and cash out like many a cooperative did.
That’s also why people shouldn’t be forced to be rational. The Sovjet Union was forcing people to be rational but people weren’t happy.
The fuck has the USSR to do with anything we’re talking about. Also why are you calling tankies rational go to lemmygrad if you like them so much.
For me, the context was surplus to drive prices down. If you want to avoid surplus, you need other ways to regulate prices. Do you just want to fix prices for many things and otherwise let companies figure out how to supply the things for the given price?
“Manipulation” implies intent to achieve that state of affairs, and, no, that wasn’t the goal of capital. Capital wanted ROI and looked for it in the wrong place.
It is a political decision to keep the housing market stable. If the market goes down, many people lose their retirement provisions.
There are not enough plots, in Germany the rent is capped but the building requirements don’t allow to reduce costs. Change those, and capital will build more housing. But capital doesn’t matter. Those syndicates could build all housing, but they can’t, because the housing market is politically manipulated.
In the US, yes. Europe by and large doesn’t have such inane laws.
There are enough laws in Germany that you cannot have a prefabricated house and build it everywhere without ajustments. Low tech high risers should bring rent down to a fraction but they are not allowed to be built.
For me, the context was surplus to drive prices down.
Then you want to regulate the market such that there’s a surplus of ordinary apartments and a relative lack of luxury ones. People are free to furnish theirs more luxuriously, that’s not an imposition, but not having affordable ones would be. No need to get into fixing absolute prices all you need to control for is relative availability.
The market is not a good in itself. It is a mechanism to attain good things. To do that, in the real world, to actually approach the free market ideal (perfect resource allocation by perfectly rational actors acting on perfect information) you have to enact regulations because, as we already discussed, both rich and poor folks alike are idiots: The rich invest in stuff based on hype, creating real estate bubbles, the poor tolerate 120 buck fridges even though they want 150 buck fridges.
If the market goes down, many people lose their retirement provisions.
Again we’re in /c/europe, here, not in the US. Also why should irrational investors deserve protection. “Socialism for the rich but not the poor”?
There are not enough plots, in Germany the rent is capped but the building requirements don’t allow to reduce costs.
Rent increases are capped. Not rents for new construction. Rents that the welfare system will pay are capped, not the ones on the open market.
…and yes there are plots. There’s actually a shortage of construction capacity, not in the least because politics just won’t commit to firm targets, something that construction companies can work with, make sure they don’t overshoot when growing. They’d rather not go bankrupt so they only increase capacity conservatively.
Change those, and capital will build more housing.
There is no shortage of capital flowing into the market, there has never been a shortage during all of this. The issue that noone wants to, or can, pay the rents that those people demand. We’ve been over this. The same investment at a more moderate ROI expectation would’ve built everything we need multiple times over.
There are enough laws in Germany that you cannot have a prefabricated house and build it everywhere without ajustments.
Oh sure some municipalities will tell you that your roof needs to be at a certain angle. That’s peanuts compared to the overall costs and believe it or not, there’s generally a reason for those requirements – it may seem cultural but if you e.g. get a lot of snow you either want all snow to come down as fast as possible, or not at all. People weren’t stupid 500 years ago when everyone started to angle their roofs like that.
Low tech high risers should bring rent down to a fraction but they are not allowed to be built.
They’re absolutely allowed to be built, you can still build the same kind of housing stock as was done after the war during reconstruction.
Lastly, beware of looking at all this in isolation: Getting rid of regulations that ensure that the city looks nice, is liveable, is walkable, that housing is healthy to live in, the whole shebang, would have untold macroeconomic costs down the line.
If you’re a manufacturer and you’re not sure whether your product can last 10 years then you’re free to contact an insurer and hash something out with them. Still, the buck stops with the manufacturer everything else is pointless bureaucracy. Shit broke? Manufacturer is on the hook, replace it. Simple as that. Not “customer now has to deal with a bank and the manufacturer and a rating agency”.
I don’t see much speculative capital flowing into home appliance rentals and turning regular home appliance rentals into short-term high-profit rentals.
There’s not even an oversupply of luxury appliances at the expense of reasonably-priced ones.
Quite literally nothing about the housing market issue has anything to do with what’s going on on the home appliance one, or with overregulation. Sure, in places there’s regulations to re-think or even straight abolish, e.g. parking minimums, but generally building codes don’t make stuff more expensive. Least of all on a macroeconomic level. The issue, for a long time, were ROI expectations of investors. It’s a general problem in the economy: Too many rich fucks with too much money, not knowing what to do with it, where to invest it, but still wanting their 8% because… why. They’re already filthily rich. I totally get a starving artist rent-seeking, “then I can let go of my day job and focus on my art”, but a billionaire? Get the fuck out of here.
The main bottleneck for the housing market is land in areas where people want to live. People have to pay whatever they can to live close to their work. If demand is so big, of course only housing with the highest margins is developed, which is the luxery market.
The speculative capital is flowing because the high demand keeps prices stable. If there would be a surplus to the point that the speculative capital doesn’t find a buyer when selling, prices would be much lower. The backing for the high prices are the real tenants though who want to live where they work.
Appliances don’t need the speculative capital to become expensive. It is enough if there is less competition. Then customers can’t ‘move’ to other products and have to pay whatever is demanded.
If the requirements stay limited to an extended warranty then things can remain competitive but I doubt that the regulations will end there. This should take cheap Chinese brands off the market that don’t have a support network in Europe. That’s good for nature, but it removes the cheap options off the market which will allow the market to rise the prices for the cheapest durable goods.
BS. There’s no market for overpriced accommodation which developers finally understood so they’re dialling it down. Took them long enough.
It’s not about not finding a buyer. It’s about finding a buyer that meets their ROI demands, otherwise they’re happy to just let properties sit idle. That’s the “speculation” part.
Again, the solution is regulation in the form of taxing vacant property. Can’t find a tenant, you say? City will be happy to provide you with one, straight off the top of the waiting list for social housing. Not the price range you want to rent for? Well, then you can pay taxes until you think otherwise.
In the end, money is power. If you don’t want all the power to end up with whoever happens to have money you gotta stomp people with money at some point or the other. When they whine, tell them they should become better business people, not invest in such stupid schemes as trying to turn a working class neighbourhood into accommodation for billionaires.
Turkish, more like, China isn’t really in the market here and Beko rules the low end. Still, two years warranty instead of the one year that’s the legal minimum.
And honestly, 120 Euro fridges turning into 150 Euros fridges would be a good thing. Building things in a solid way is a different thing than blinging it out: Don’t push designers to get rid of the fourth bolt for the attachment plate, don’t save fifty cents by buying cheap lubricant, penny pinching is a disease. May increase GDP in the broken window way but who the hell wants that.
A surplus in supply would threaten them with an infinite time to wait for their target ROI.
fully agree
Fiat currency. Public banks can hand out credits to whomever wants to build with a solid calculation.
You tax them. Of course only possible if the masses are not manipulated. Drones and AI, stomping would only be possible for something like 5 more years. Afterwards there is not much more power left.
More like 120 Euro fridges leave the market and 150 Euro fridges cost 200 Euros.
I want to live in a society where people choose the solid products on their own. Everything else calls for trouble down the line.
I don’t undderstand that.
Dindingding winner winner chicken dinner. That’s exactly what’s happening. Question still being why such stuff should be allowed in the first place, why should ordinary folks have trouble getting apartments just so that some rich fucks can try to make profit.
You can’t just print money because inflation. That said, yes, public banks are absolutely able and willing and happy to invest in housing projects. It’s how e.g. these folks get much of their money. Things get difficult though when there’s speculators throwing money around, artificially increasing property, land, and construction prices. Public and cooperative banks are generally happy if your project earns enough rent to finance their fixed-term deposit rates but with inflated costs earning that rate means inflating rents and then you again might be out of people who can afford it.
Side note the mortgages on multiple flat type properties don’t tend to get paid down, ever: By the time the mortgage matured it’s time to renovate the thing, and you roll it over into a new one. Still the rent prices you can achieve with that are nothing like you see on the open market.
It is irrational to expect rational behaviour from people.
https://en.wikipedia.org/wiki/Parable_of_the_broken_window
Because we have a market economy. We can switch to planning, but that has its own disadvantages
They should not. It’s market manipulation that we don’t have enough apartments. With different zoning laws or more plots to built, there would be enough apartments.
Tax empty housing, or housing in general, and speculation will disappear.
In which way? Why are those apartments not on the open market?
That’s also why people shouldn’t be forced to be rational. The Sovjet Union was forcing people to be rational but people weren’t happy.
I tried to make sense with this. https://en.m.wikipedia.org/wiki/Broken_windows_theory
Now it’s clear.
Planned economy is not when there are regulations.
“Manipulation” implies intent to achieve that state of affairs, and, no, that wasn’t the goal of capital. Capital wanted ROI and looked for it in the wrong place.
In the US, yes. Europe by and large doesn’t have such inane laws.
The syndicate – did you read the link I gave you – specifically works towards removing properties from the market, get all control into the hands of the tenants. Rents pay for the mortgage, that’s it, no middleman, and the legal structure ensures that tenants can’t band up and cash out like many a cooperative did.
The fuck has the USSR to do with anything we’re talking about. Also why are you calling tankies rational go to lemmygrad if you like them so much.
For me, the context was surplus to drive prices down. If you want to avoid surplus, you need other ways to regulate prices. Do you just want to fix prices for many things and otherwise let companies figure out how to supply the things for the given price?
It is a political decision to keep the housing market stable. If the market goes down, many people lose their retirement provisions.
There are not enough plots, in Germany the rent is capped but the building requirements don’t allow to reduce costs. Change those, and capital will build more housing. But capital doesn’t matter. Those syndicates could build all housing, but they can’t, because the housing market is politically manipulated.
There are enough laws in Germany that you cannot have a prefabricated house and build it everywhere without ajustments. Low tech high risers should bring rent down to a fraction but they are not allowed to be built.
Then you want to regulate the market such that there’s a surplus of ordinary apartments and a relative lack of luxury ones. People are free to furnish theirs more luxuriously, that’s not an imposition, but not having affordable ones would be. No need to get into fixing absolute prices all you need to control for is relative availability.
The market is not a good in itself. It is a mechanism to attain good things. To do that, in the real world, to actually approach the free market ideal (perfect resource allocation by perfectly rational actors acting on perfect information) you have to enact regulations because, as we already discussed, both rich and poor folks alike are idiots: The rich invest in stuff based on hype, creating real estate bubbles, the poor tolerate 120 buck fridges even though they want 150 buck fridges.
Again we’re in /c/europe, here, not in the US. Also why should irrational investors deserve protection. “Socialism for the rich but not the poor”?
Rent increases are capped. Not rents for new construction. Rents that the welfare system will pay are capped, not the ones on the open market.
…and yes there are plots. There’s actually a shortage of construction capacity, not in the least because politics just won’t commit to firm targets, something that construction companies can work with, make sure they don’t overshoot when growing. They’d rather not go bankrupt so they only increase capacity conservatively.
There is no shortage of capital flowing into the market, there has never been a shortage during all of this. The issue that noone wants to, or can, pay the rents that those people demand. We’ve been over this. The same investment at a more moderate ROI expectation would’ve built everything we need multiple times over.
Oh sure some municipalities will tell you that your roof needs to be at a certain angle. That’s peanuts compared to the overall costs and believe it or not, there’s generally a reason for those requirements – it may seem cultural but if you e.g. get a lot of snow you either want all snow to come down as fast as possible, or not at all. People weren’t stupid 500 years ago when everyone started to angle their roofs like that.
They’re absolutely allowed to be built, you can still build the same kind of housing stock as was done after the war during reconstruction.
Lastly, beware of looking at all this in isolation: Getting rid of regulations that ensure that the city looks nice, is liveable, is walkable, that housing is healthy to live in, the whole shebang, would have untold macroeconomic costs down the line.