How an obsession with home ownership can ruin the economy

Only if you like being bullied by unreasonable property manangers, real estate agents and other associated wankers.

Id rather have my own land and house and never get nosey intrusion from some dimwits who pretend to know what 'normalcy' is.

Id rather have my own land at the end of it instead of paying endless starata fees for services I NEVER receieved.

As simple as that.

Only thing is that a lot of housing market across the world are severely OVERPRICED due to economic mismanagements and other forms of idiocy.

No

This is a horrible video. One of the worst i have ever seen. Yes housing downturns can be bad in the short term but the creator ignores the building of equity and price appreciation of home ownership. I classify this as mis-information.

Informative documentary, but blaming the housing crisis on people wanting to buy a house is super misleading

home ownership isn't the problem, the anti family/society economy is the problem.

there is no "rich world" we all are slaves.

Is this for real? so this objectively cost the same but with one YOU ACTUALLY OWN SOMETHING, and this guy is saying its a toss up

This is a mix of few reasonable points with a bunch of garbage. Yes, excessive focus on fostering home ownership can reduce the funds available to social programs who benefit those who cannot get on the property ladder. Yes, home ownership can make people less mobile. But if it's somewhat reasonable to expect youth to move around looking for opportunities, it is normal for established adults to want to settle down, but I guess according to the authors we should sacrifice this to the altar of the economy, because our overlord the labour market wants us mobile.

Choosing Switzerland and Romania as countries to compare is quite ridiculous. No point can ever be made by picking only two countries with lots of differences and attributing everything to the home ownership rate. Many older people in Romania own their home because it was assigned to them by the communist government. That's why the home ownership rate is high. But many now cannot afford to fix the roof and the walls, which is why in many towns in Romania you'll see signs warning that shingles and plaster may fall.

Switzerland is far from the idyllic system they describe: a olygopolised real estate market, where real estate agencies have incredible unwarranted power. You are (somewhat) protected as a tenant but you are at the full mercy of the agencies as a perspective tenant.
People are reluctant to force agencies to lower their rent if they don't know that they'll spend a decade or more in that apartment, as being blacklisted by agencies can make it way harder to find a place if you need to move.
Similarly, although it is nice that rent cannot be increased without a reason, it cannot even be adjusted for inflation. As such, any change in the market happens with new contracts only. You have old or middle-aged people with 20+ years old contracts spending half the youth next door. As a consequence, people hog their apartment and don't leave it unless they have to. I know people who live in Lausanne and commute daily to Geneva to work (for decades) not to let go of their rent contract. Again, this helps tenants but perspective tenants foot the bill

seems like capitalism is now aiming to make us all homeless. keep your apartments everyone!

It should be! Cleaning grease isn'r fun! And having people call on cell phone's to scare people because they live another way is poor! Plus if you follow the rules and outsiders cause issue's, what does that say about them and our security within our country! Security is not a uniform gig, it's a respect issue and what a person worked for to get thier home! Such as flipping house's, fixing a cottage and gaining 40'000$ equity to pay for a down payment! Stop squater's and people disturbing other's hard earned land! 2023! To many dogs making marks within other people place's!

A promo video for the WEF explaining how you shouldnt own anything to be happy.

Annoy the WEF, own property and be happy.

This has got to be the weakest argument I have ever seen. Even the people you interviewed highlighted the intricacies of how it changes according to your circumstances and the current economic state (boom vs bust stage of the cycle). 3 years later it's clear that rent prices are not sustainable since they end up being treated like they are a derivative stock product causing prices to increase while wages fail to keep up. Garbage liberal economics propaganda.

house shall remain house, not investment

In a western society with the ever increasing gap between the haves and the have nots, one really has to question a so called economist's critique of the working man desiring to have somewhere/something to call his own. Ask any German or Dutch person if they would prefer to rent or own their own home. The answer is easy. They rent out of necessity not because it's more preferable

The effects of the downturn are beginning to sink in. People are being impacted by the long-term decline in property prices and the housing market. I recently sold my house in the California area, and I want to invest my lump-sum profit in the stock market before prices start to rise again. Is now the right moment to buy or not?

This just sounds like landlord propaganda. Even if people don't buy their houses themselves, someone still owns them. Someone reaps the benefits of the ownership. I'd rather the resident reap the benefits and security of owning the home then some investor. I usually respect your content but this just isn't it.

On first viewing, this video is absurd. Has anyone at "The Economist" studied Hans-Jochen Vogel's writings, in particular, "Gerechtigkeit"? Among many others, this video raises the following question - - Which is more at fault for unstable housing: (1) government policies encouraging home ownership, (2) government policies promoting continuous growth of populations and growth of productivity, (3) the inability of economists and government policy makers to recognize the fundamental difference between land and products or services, where land is fixed in supply? So long as real estate prices continue to rise, due to increasing populations and hence demand, while livable land cannot multiply, land prices will continue to rise faster than wages. Already 60% of Americans do not have sufficient income to afford the median priced home in their geographic region because the monthly mortgage would exceed 30% (bank policy) of their income. What this means is that a smaller and smaller slice of wealthy elites will be able to afford to buy raw land or developed property. More and more Americans will be forced to pay rent to a smaller and smaller group of wealthy property owners. Or, in other words, more and more Americans will be slaves to low paying corporate wages with a bigger and bigger slice of their income going to pay rent. This video also totally ignores the consequence of life long renting, which can leave a person destitute without any retirement savings, while home ownership gradually builds a pile of equity, especially from the longer term climb in real estate values. Is it right for people who have grown up in a city to be forced to leave because investors want to continue pushing up real estate prices and rents? I think there is a more fundamental right to life, liberty, and pursuit of happiness, which supersedes any goal of increasing corporate profits to increase dividends to shareholders and already astronomical salaries for CEO's. Can you only measure quality of life by superficial metrics using abstract efficiencies of productivity? Wealthy Americans, REITs, and Hedge Funds already have the advantage of being able to pay cash for real estate, while those with insignificant savings and income cannot qualify for a mortgage loan from any source, further segmenting the landed aristocracy and disadvantaging the poor.

Okay, no one ever addressed the perspective that owning a home and selling that home would be an investment upon retirement age. What are you going to sell when you’ve been paying someone else’s mortgage your whole life? I’m sorry, but owning a home is the better financial decision. This is grade A propaganda.

Though I hear the case made here based on an individual life span, the argument breaks down if you think about generational wealth. Renting a home across multiple generations is obviously more costly that securing a home that future family generations can use

Buying is the same as renting....until your mortgage is paid and when you retire have you got the means to continue to pay your rent?
Mortgage pay for 25 yrs
Rent pay for life

Is it hard to see we can sell a house, but cannot sell a rent? And that house prices/value normally go up?

Edit: For many people, the only inheritance is the parents house. Imagine if they rented, they invested somewhere else...? or there is nothing for the youngsters? 👀

WEF finger on this video? 🤔

Renting is ALWAYS worse

The government is your landlord, you don't "own" anything - the industry's done an amazing job at programming people

You vill own nothing and be happy.
- Klaus Shuab

This video is clickbait - "ruin the economy", my foot! No examples were given, just a vague suggestion that people want to move less when they own their home. Actual arguments against ownership might be that other assets give a higher rate (maybe) or that building houses in the private sector might not be the best use of capital (again maybe).

I think a housing crash will happen because all those people who bought homes over asking price, although it was at a low interest rate, they are over their heads. They have no equity if the housing prices continue to go down, and if for whatever reason they cannot afford the house anymore and it goes into foreclosure because even if they try to sell, they will not make any money. I think this will happen to a lot of people especially with the massive layoff predicted for the future and the cost of living rising at a high speed.

How is never ending rent payments a better idea? We own our house, car and truck. All the money that went to payments is now ours.

This is the worst psy op

Home rental is considered as a less stable lifestyle in Japan because elderly people and foreigners are more likely to be refused when they try to rent a house. How about in other countries?
I don't know whether other countries have the same problem, but it seems that many countries are sharing the idea of "unstable rent, stable ownership"

Sounds like the authors are socialists...

Only fifty percent of German’s own there own homes.

If as a renter there is no assurance of stability (in both the price and the access), people will always want to buy and own. This is what extensive privatization of land gets you.

I detest the monopolizing practice of millionaire real estate investors. Buying up all the homes (simply to rent them out), investors are ruining the real estate industry by making homes less affordable for the average person who wants to live in one. Real estate investors are also decreasing the quality of American homes by not purchasing homes they really care about. People follow their lead, and the entire industry just thrives on flimsy real estate for profits.

Most homes today are overpriced for their value, poorly constructed, covered in cheap vinyl plastic, and worthless. Every house looks exactly the same, so there is no character. You can no longer tell one house from the other in most neighborhoods, and greedy investors are partly the blame.

Builders aren't using high-quality materials to build homes, because buyers aren't purchasing better quality homes. Americans are moving far too often. Buyers might as well be investors, since they're moving every 3-5 years! In the past, people never moved that often. When buyers constantly buy-flip-move-repeat, they lose interest in the quality of the homes they're buying. Moving so often, buyers aren't inclined to care about how homes are made and whether the homes they purchase were built to last.

Those who care about housing affordability AND quality end up with limited choices because builders are just catering to real estate investors and frequent movers. A problem too are the many "quick homebuyers" or "cash-for-houses" investors cropping up who trivialize the homebuying process and treat homes as though they were mere throw-away commodities.

Finally, I'll say that we have enough wanna-be real estate investors! We need more people who want to buy AND live in well-designed homes, and live in them for a really long time. This needs to happen for builders to revert to caring about building homes properly and well. Real estate agents and investors not caring about the quality of the homes they help people purchase and sell, does an incredible disservice to American homeowners.

So who are the renters renting from? People that own not one, but multiple properties. Is the point of this video promoting having only a rich few people own a large portion of homes, while the rest of the peasants have to be content to just rent instead of having the security of their own property?

As a renter:

-Can't paint the wall the color I like
-Can't have a dog if the landlord doesn't agree
-Can't change the old furnitures
-Can't change the old appliances
-Can't renovate the house to my own standard
-My rent can go up anytime
-I can be kicked out anytime
-I can't register my business without landlord's permission
-I pay a lot of money to the landlord every month...

IS THIS OBSESSION OR YOU ARE TRYING TO MAKE US ALL LOOK LIKE FOOLS?

The arguments sound very coloured. Too many anecdotal evidences, what if's, sexism, among other tools are used to warp and twist the minds of specific consumer segments through this video.

Hmm. Maybe justifiable when rents were only eye-wateringly expensive - rather than the eye-bleedingly rates we see now.

I think it’s ideal to buy. You might not benefit but your kids will because they will not have to buy their own house.

The ads in between are so distracting

Who can afford a home theses day's it's for the rich

Yes, definitely much better to line the pockets of some landlord via massively above-cost rent than build your own wealth...
I wonder if the staff of the economist would see themselves more as the renters or the landlords in this new system? I wonder if they would vote for rent controls?

The elites are the ones who buy homes in the richest neighborhoods of every state. Of course they don't preach what they practice... Follow what they do not what they say... they're hypocrites basically..

Most people look to there home as a form of saving . When the mortgage is finished you have a larger spendable income to use or save. Renting you rent until you pass away.

I am living in central Florida. Renting a place of similar size, location, quality and features as my home is neither affordable or available.

Too many open questions after this. Would really appreciate links to the studies mentioned. This is especially needed around Western housing policies being a "mistake" and references to how they determined renting and buying being a break even in the long run.

Bro renting will never be better than buying otherwise no one will ever buy a real estate and everyone will just rent and developers will go bankrupt but having said that real estate is the worst and jobbers are seriously being scammed here.

to all the offended homeowners: this is about macroeconomical implications and its relations to social dynamics not about your mortgage that you are proud of for some reason. lol

@ the Economist: I don't think you accurately understand why the 2008 crash happened in United States. There are lot of resources out there that you can read to better educate yourself.