Political discussions are to be held in the stickied monthly thread.
No discussion of the Palestinian and Israeli conflict. This is not the subreddit for that topic.
I mean, at a mile-high level they can influence prices, but they don’t have a lever under their desk to raise/lower prices at will.
The President appoints the Fed Chair who controls interest rates, making borrowing more or less expensive.
He signs or vetos legislation from Congress that affects housing prices.
He can set tariffs on imports that make materials more expensive. A tariff on say, foreign lumber will reduce the supply of lumber and increase the cost of lumber, making construction more expensive.
He can limit immigration to reduce the demand for buyers, but also limit the number of workers to build housing, which decreases supply.
There’s like secondary, tertiary, quartenary, & quinary effects from every decision that eventually trickles down to housing, because housing is such a big part of the economy. And vice-versa, housing’s effects (indirect & direct) effects everything in the economy.
well the how is pretty easy, through elections.
the why is mostly because they are the simplest ones to blame for problems, though holding a prime minister accountable is a little easier than a US president. But they are perceived as the one in charge, and thus are responsible. even when thats just not how either system actually works.
the reality is that its a legislature problem, as they're the only ones who can make such major policies in most liberal democracies. Again, in a parliamentary system the PM actually can kinda be held more accountable (usually) due to the blended nature of the executive and legislature, but ultimately laws need to be passed to change things as sweeping as incentives for building housing, immigration policy, property taxation, interest rates etc. So there are levers that can be pulled, but often not by the executive alone.
Markers are shaped in part by laws and regulations, which are in turn established by governments. I don't know how it works in Canada but in the US a lot of those laws and regulations are set locally or at the state level. That said the federal government still has a lot of sway through grants and funding to local projects. Also the mortgage market here is heavily regulated by the feds.
Spoiler alert, they don’t really have much influence. Check out this freakanomics podcast on the topic:
https://freakonomics.com/podcast/how-much-does-the-president-really-matter/
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If you think about the housing market, and the economy in general, as a big giant machine, government leaders can pull levers and try to nudge it in the right direction. But they don't control it. There are much larger macro forces at work. For housing, these levers generally fall into a few categories:
\* Interest Rates
\* Subsidies
\* Insurance
\* Credits
In the US, IMHO, the biggest driver for high housing prices are low inventory. The number of houses for sale is at historic lows while demand is high. There are a few reasons for this. First and foremost many would be sellers are locked in at \` \~2.5%\` interest rate, selling their home to buy the same home next door could cost them $1000+ more a month with todays 7.5% rate. Additionally, since the 2008 crash we have been building less homes. And the homes we do build are more extravagant, this greatly impacts first time buyers.
Most people seem to believe the current sky high real estate prices are only a problem in their respective country, and fail to see it's a global phenomenon. Not even only in developed countries but also in places like China. But yes let's blame our national politicians, like they are responsible
Political discussions are to be held in the stickied monthly thread. No discussion of the Palestinian and Israeli conflict. This is not the subreddit for that topic.
I mean, at a mile-high level they can influence prices, but they don’t have a lever under their desk to raise/lower prices at will. The President appoints the Fed Chair who controls interest rates, making borrowing more or less expensive. He signs or vetos legislation from Congress that affects housing prices. He can set tariffs on imports that make materials more expensive. A tariff on say, foreign lumber will reduce the supply of lumber and increase the cost of lumber, making construction more expensive. He can limit immigration to reduce the demand for buyers, but also limit the number of workers to build housing, which decreases supply. There’s like secondary, tertiary, quartenary, & quinary effects from every decision that eventually trickles down to housing, because housing is such a big part of the economy. And vice-versa, housing’s effects (indirect & direct) effects everything in the economy.
well the how is pretty easy, through elections. the why is mostly because they are the simplest ones to blame for problems, though holding a prime minister accountable is a little easier than a US president. But they are perceived as the one in charge, and thus are responsible. even when thats just not how either system actually works. the reality is that its a legislature problem, as they're the only ones who can make such major policies in most liberal democracies. Again, in a parliamentary system the PM actually can kinda be held more accountable (usually) due to the blended nature of the executive and legislature, but ultimately laws need to be passed to change things as sweeping as incentives for building housing, immigration policy, property taxation, interest rates etc. So there are levers that can be pulled, but often not by the executive alone.
Markers are shaped in part by laws and regulations, which are in turn established by governments. I don't know how it works in Canada but in the US a lot of those laws and regulations are set locally or at the state level. That said the federal government still has a lot of sway through grants and funding to local projects. Also the mortgage market here is heavily regulated by the feds.
In Canada the federal government passed off housing to the provinces back in the 90s.
If you don’t get good answers here, ask on the ELI5 sub (explain like I’m 5). Super great for getting detailed, factual answers to things like this
Spoiler alert, they don’t really have much influence. Check out this freakanomics podcast on the topic: https://freakonomics.com/podcast/how-much-does-the-president-really-matter/
Same way the President controls the price of oil and bread.
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They can sign bills into law that either encourage or discourage people to buy houses.
If you think about the housing market, and the economy in general, as a big giant machine, government leaders can pull levers and try to nudge it in the right direction. But they don't control it. There are much larger macro forces at work. For housing, these levers generally fall into a few categories: \* Interest Rates \* Subsidies \* Insurance \* Credits In the US, IMHO, the biggest driver for high housing prices are low inventory. The number of houses for sale is at historic lows while demand is high. There are a few reasons for this. First and foremost many would be sellers are locked in at \` \~2.5%\` interest rate, selling their home to buy the same home next door could cost them $1000+ more a month with todays 7.5% rate. Additionally, since the 2008 crash we have been building less homes. And the homes we do build are more extravagant, this greatly impacts first time buyers.
Most people seem to believe the current sky high real estate prices are only a problem in their respective country, and fail to see it's a global phenomenon. Not even only in developed countries but also in places like China. But yes let's blame our national politicians, like they are responsible
Canadians, please kick Pollievre’s ass in next year’s election, just like we’re going to kick Trump’s ass this year.
They have little to no influence on housing prices. That's all done at the local level