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I'm not really sure what you're trying to add, so here's a few questions and examples of my points. Have you read much economics? a) Firstly, I said landowners, not home buyers. Are you claiming that nobody owns land without a mortgage? Most land value is in residential real estate these days, but not all of it. Much of that value is owned outright - either by homeowners or investors. This varies regionally but could be about 25-50% of the land. What do you think happens when a mortgage is paid off? What about a mortgage on an investment property? What about all the boomers who paid of their loans 20 years ago? While I did list taxes in my original comment, landowners do not necessarily need to pay significant maintenance, for example in the case of undeveloped land, or the case where the value of the house is very low relative to the value of the land. b) Yes, market dynamics are frequently misunderstood. Do you deny that it is misunderstood, or are you implying it is misunderstood by me? As a case in point, your own example is actually simplified to the point of being wrong - investors frequently buy land with a loan such that the mortgage payment is greater than the (rental, business, etc) return. They do this on the expectation that future yields will make up for the losses. In most jurisdictions this strategy is actually incentivized by the tax system - money lost on the interest payments can be offset against taxable income from your other assets. Are you claiming this doesn't happen? Likewise, in my city, many commercial properties are unleased, but the asking rent is not reduced to the point that they get tenants. This is a 'feature, not a bug' of market dynamics - a fact which is frequently misunderstood by laypeople. c) Again, what are you adding here? You are saying that the profits are not realised? This is simply untrue - property investors do realise their profits, typically via rent. Are you saying landownership is not profitable or it is not more profitable than other enterprises? |