[muhneesh]

It would be useful for the HN title to qualify that this isn't about the U.S.

With the new tax changes + increases in the interest rate, the downsizing phenomenon will not make as much sense in the U.S. given incentives to hold onto the property and the inability to buy a proportionately valuable downsized house.

[ethbro]

The decrease in interest premiums (on max 1M -> 750k principle) and state property taxes (10k cap) would seem to be a net negative for people sitting in expensive homes, which seems like it would prod to some sales and downsizing around NYC and SF.

[muhneesh]

My point on the tax incentives were that current homeowners are grandfathered into their mortgages (assuming they bought before Dec. 2017).

Regarding state property taxes, I think they are treated as a local tax - so it wouldn't affect NY or SF given that their state income tax is likely to be higher. Your point is true in other geos though.