[Spooky23]

> The reason that prices are going up is because a lot of people want to spend a lot of money for the real estate...

No. Real estate is 80% driven by finance and tax policy.

The condo craze is just like the big box and franchises hotel boom a 15 years ago. Lots of money flows in, and the buildings get sold when they start losing money around the 15 year mark when depreciation catches up. Many of the marginal “luxury condos” will be shitty rentals in the 2030s when maintenance becomes a problem, and you’ll see them rapidly go down market.

By that time, the money will have moved on the the next thing, and we’re all stuck with the mess.

[geezerjay]

> By that time, the money will have moved on the the next thing, and we’re all stuck with the mess.

What mess would that be? A wealth of cheap condos in a market flooded by companies liquidating their investment?

[Spooky23]

Bankrupt condo associations and people with underwater mortgages walking away. For the rental units, the profits tank, so the landlords tighten the screws on opex, and they aren't "luxury" anymore.

You may recall 2008, when this phenomena happened with single-family homes. Condos are much more fickle investments.

[Scarblac]

Note that in the Netherlands you can't just "walk away" from a mortgage. If the bank sells your house and the yield isn't enough to pay for the mortgage, you're still on the hook for the rest.

After 2008 the housing market just more or less closed down. Nobody was selling as their mortgage was under water, so they just stayed where they were.

[mywittyname]

You still have to pay to maintain them, and expensive high-rise condo maintenance sets a natural floor for rents.