Foreign funds help make housing unaffordable: research

Awful headline and I doubt it's what the author would have chosen, given that her comments are much more to do with supply:

> “In San Francisco, demand is reflected in increased prices,” she says. “In Charlotte, demand is reflected in increased quantities.”

> “A big takeaway is that cities are in control of a big portion of their supply sensitivity,” Gorback says. “It’s cities that control zoning. It’s cities that control permitting. The real keeper of the keys are the municipalities.”

The US is special insofar as the US stock market is extraordinarily safe with many options for value investing. In much of the rest of the world it's the reverse: domestic stocks are risky and it's real estate, land and gold that are the safe, prestige assets.

When you add in an unstable environment at home, this mentality leads to foreign real estate being perceived as the ultimate asset. It's perception rather than reality because foreign real estate is not exactly a good investment, especially if non-resident: it's illiquid, highly taxed, requires insurance, is easy to confiscate, etc.

True or not, there is little doubt demagogues play on foreign capital when arguing about house ownership costs to the mostly young renting classes.

My own belief is that at national scale the % of foreign capital in housing stock for most western democratic states is low, and when it exists in scale its things like the Canadian teachers pension fund or .. Blackstone.

In America, I suspect it's Blackstone before foreigners.

Housings (US) greatest feature is money laundering: https://globalwitness.org/en/campaigns/corruption-and-money-...

Most countries have residency by investment programs. Invest in real estate, prop up residential home pricing by injection wealthy foreigner/criminal money. Which imo is pretty idiotic.

All kinds of money:

"Anyone who’s lived in London as long as I have can’t fail to notice that over the last 30 years, the city’s become awash with money. From the mid-90s onwards (the last time property was affordable to anyone on an average salary) shops have got more designer, cars faster, and property commands ever more eye-watering sums. Knightsbridge and Belgravia have become the playground of oligarchs and at the centre of it all — that temple to Mammon — stands Canary Wharf, home to banks, insurance companies and lawyers, gleaming on the London skyline, its shiny windows hiding shady deals.

‘Londongrad’, ‘Moscow-on-Thames’… That Russian money has been given a warm welcome in London is no secret. Over the last two decades, swathes of prime real estate in London and its surroundings have been bought by wealthy Russians looking for a safe haven for their cash, with few or no questions asked. "

https://www.investigate-europe.eu/opinion/londongrad-a-citys...

The US also drastically stopped constructing new houses after 2008

> An influx of foreign money during the 2010s drove up housing costs in the areas with the greatest concentrations of purchasers from outside the U.S., finds Caitlin Gorback, assistant professor of finance.

This just in, water is wet.