alt Hacker NewsRenting it still increases the housing supply, someone can live there.
I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that? It’s a stupid and expensive place to park money. You have to pay taxes, possibly condo/co-op/HOA fees, pay someone to do maintenance and keep out squatters, pay transaction costs both buying and selling, it can’t be sold quickly.
Why would you do all that instead of just buying treasuries or some other liquid instrument that actually earns money?
There may be some of this from foreign investors that don’t have easy access to financial markets, but again, some Russian oligarch buying a $50M penthouse in Manhattan is not the reason an average 3 bed 2 bath suburban home is $700k. They are not remotely in the same market.
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> I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that?
In high-demand areas property value often increases in value over time. You can literally “buy and hold” property, keeping it empty, doing nothing with it and expecting to sell it for a profit at some point in the future. It’s relatively safe and the rate of return can be significantly greater than inflation.
This ignores property taxes and costs of doing business of course. But there are also situations where you might want a reported tax loss on a profitable asset.
Banks will not loan you money to put it into the S&P. The wealthy generate money by generating credit in part.