No, I got it. I just think that would mainly mean investors exit the market.
If it is less profitable, they either further raise the prices or they get out of the market; the ratio of those two options depends on price elasticity. And prices don't have a lot of room to grow further in my opinion... unless of course the wages grow quickly (and minimum wage indeed has done it in the last 5 years). But then the country needs to be more productive or people get poor (fired!), which is also not good for the renting business, etc.
At the end of the day you're betting on the spanish market either squeezing people further, or gaining productivity real quick. And real estate is not very liquid, yet is typically long-term, and those investors are risk averse. So... there will be some that will exit the market.
And what happens when people leave the rental market? Fewer apartments for rent. And what happens to rental prices when there's a scarcity of apartments to rent? Prices go up.
Well, no one can pack the apartment and leave the country. At worst they are left unoccupied, but that's a lot of money to have it parked, and can be discouraged with taxes; so alternatively people sell them... so buy and rent eventually go down.
And what will the buyers do with the apartments? Rent them? Well, then they'll either have to spend money on security or price the risk of okupas into the rent. In either case rent goes up.
This is as nonsensical as the proposals in San Francisco to prohibit the construction of apartments to try and reduce rent. Dissuading people from renting out apartments reduces the supply apartments. There is zero possibility this results in better rental prices.
Again, the comment you responded to explains how this makes it more risky and less profitable to rent out apartments. It's dissuading people from renting:
> you're also making it more risky and thus less profitable to buy and rent out apartments
When something becomes riskier, fewer people do it unless there's some other incentive.
A vacancy tax could incentivize renting, buy enabling squatters does nothing but making rentals more risky. The only thing that can solve a shortage is increased supply or reduced demand. The latter is not feasible since people need housing. The former requires that land owners take the risk on renting out apartments, and anything that increases the risk means less people will do it.
> Find a good tenant
That's easier said than done. The better way to convince prospective renters to rent out their property is to make it easier to kick out bad tenants. If evictions are backlogged, then a landlord risks being stuck with a non paying tenant for a long time.
This kind of thing baffles me. Im telling what is happening here. A guy on the internet refers to another on the internet who 'explains' to me that what is happening where I am in the actual reality is not real.
That's literally crazy. It feels like you people are preaching. Against the reality.
When a renter buys an apartment or house to live in, that means the place they rented becomes vacant. It is the most basic math, addition and subtraction. Lower real estate prices means less renters and thus lower rents. Unless you conjure people into the country by immigration.
Making renting riskier doesn't inherently make property less expensive. If a shortage of rental properties makes more people want to buy condos and houses, then there's more demand for condos and houses. Making renting riskier also means that apartment buildings are less profitable and less likely to be built.
A more likely outcome is that condos and houses get more expensive because of the shortage of apartments. And fewer apartments get built because investors know that they will not be able to kick out squatters.
If letting becomes a bad return on money, leaving the house empty is an even worse return of money. So you sell, and thereby get money for better investments, while at the same time the house gets an owner tenant. Real estate is fixed and cannot be physically transferred.
As for apartments, they will still be financed by people who intend to live in them. Removing the landlord removes a huge margin, because you're nourishing a stranger.
> Making renting riskier doesn't inherently make property less expensive
It did that here.
> A more likely outcome
You are literally making up stuff and preaching a false reality as you go. No wonder how the US housing market got shafted - seeing what kind of mentality you people subscribe to.
If it is less profitable, they either further raise the prices or they get out of the market; the ratio of those two options depends on price elasticity. And prices don't have a lot of room to grow further in my opinion... unless of course the wages grow quickly (and minimum wage indeed has done it in the last 5 years). But then the country needs to be more productive or people get poor (fired!), which is also not good for the renting business, etc.
At the end of the day you're betting on the spanish market either squeezing people further, or gaining productivity real quick. And real estate is not very liquid, yet is typically long-term, and those investors are risk averse. So... there will be some that will exit the market.