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Comment by heavyset_go | Hacker News Reader

> Who will be able to afford to buy a house? Will people spend more than 50% of their take-home pay on mortgage payments? This doesn't seem sustainable long term.

The US housing market is open to bidding from the richest people in the world. Wealthy people in other countries see US housing as a good way to store value, and are driving up housing prices. To answer your question: while Americans will be priced out of the housing market, wealthy people from across the globe will continue to buy into it.

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Can someone point me to statistics about this phenomenon? It sounds true that foreign investors use US housing as an investment and inflate prices, but I have no idea how large this effect is.

For reasons pointed out by another reply to your comment, it's difficult to quantify. Anecdotally, I live in newer construction in a suburb of Seattle. At first the neighborhood was populated by local people who live and work here. As the original buyers have been moving out of the neighborhood over the past 5 years, the buyers of literally all been foreign Chinese. All of the houses surrounding mine are now occupied maybe 50% of the time, and I see luxury cars with Chinese license plates parked in front of these houses all the time.

> luxury cars with Chinese license plates

People import luxury cars from China and are able to drive them with Chinese plates in Washington State?

This I would not have guessed!

There may not even be statistics - Canada doesn't have any comprehensive foreign demand data - that accounts for multi-unit demands for recent immigrants (now citizens or PR) acting as proxy buyers for third parties to evade taxes, and various other reporting gaps that exist.

So it mostly comes down to relative wealth & population sizes versus desirability of an area, and then spillover effects into surrounding areas. But unless China crashes I would expect this to be an increasing source of demand over time, especially if you live in a pro-immigration country that needs to paper over domestic government budget shortfalls.

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