r/dataisbeautiful • u/Rauram99 • 2d ago
OC [OC] Housing prices and salaries - Three immigration levels (2023-2024)
Notes:
I only included countries with >0.830 HDI >5 Millions population.
Net migration rates are a cumulative average for the last 5-10 years.
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u/Rexpelliarmus 2d ago
Doesn't really look like there's any correlation with immigration levels here.
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u/Mobius_Peverell OC: 1 2d ago
Pretty sure that's the point of the visualization. Showing that the media narrative is not correct.
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u/Common-Ad-9313 1d ago
Also “who” immigrates has an impact. I presume that outlier “SWI” is Switzerland? Probably high immigration of wealthy people moving for tax-advantaged reasons
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u/Life_outside_PoE 19h ago
Not really. Switzerland has a very stable economy and good salaries. They're in the schengen area so anyone in Europe can migrate there to work and they do. There's a ton of immigration of normal working class people.
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u/unfathomably_big 1d ago
Australia imports 500,000 people a year and builds 160,000 houses. I’m glad this graph says that isn’t an issue
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u/Facts_pls 1d ago
Yeah, I mean families exist. 3 people in one house on average may not be terrible based on average family size. .
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u/unfathomably_big 1d ago
So as long as every migrant is in a three person household, all 168,000 properties are built exactly where the migrants choose to live (Sydney) and no Australians move out of their parents or start a family or otherwise move for any reason there should be no impact on the market. Got it.
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u/okphong 17h ago
Are all houses in australia in use? There are often plenty of empty housing that is just left unused as an investment. Maybe that should be used first?
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u/unfathomably_big 10h ago
0.5% of properties, roughly 15,000 in Sydney.
Let’s say you seize every vacant house, that’ll knock out 3% of the net new requirement for year 1. What about the other 485,000 and 500,000 each year moving forward?
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u/Tropink 2d ago
As an American, the fact that housing is more affordable here than in places like Poland and South Korea is absolutely insane. Just puts in context how good we had it before the past decade of housing price increases.
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u/Rexpelliarmus 2d ago
This is the US as a whole though. There’s a lot more spare land lying around in the US than Poland and South Korea.
The problem the US has is they’ve built a bunch of new houses in areas where nobody wants to live so that kind of hides the affordability issue. In urban areas where people actually want to live, the US has barely built any houses much like many other Western countries.
Also, honestly the chart is pretty terrible because it’s hard to tell which countries are more affordable or not. The ratio lines are not intuitive. OP should’ve used more easily divisible axes numbers and added more grid lines.
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u/theflintseeker 2d ago
Korea yes, but Poland has a lot of sparsely developed land. A lot of it is good farmland so maybe that’s a competitor, but it could be developed for sure.
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u/david1610 OC: 1 2d ago
What are you talking about Poland is the Singapore of Europe lol
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u/david1610 OC: 1 2d ago
Poland isn't short of potential residential land, almost no country is short on potential residential land bar a few island states like Singapore etc.
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u/Tankninja1 2d ago
Increase being somewhat relative. I would not have like to have been someone that bought a house in roughly 2005-2007 time frame. Think it took until that Covid bump in 2021-2022 to really bounce back and we’ve seen it level off. Guessing a lot of people are still technically underwater if you bought in the early 00s when accounting for money spent on interest and property taxes.
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u/shits-n-gigs 2d ago
At least they own a house.
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u/Tankninja1 2d ago
Financial literacy is important.
Most people don’t truly own a home outright for 30 years after they buy it. Plenty more are making mortgage payments all the way to their retirement and until the day they’re in the ground.
But at least they own a house even though it’s just a giant boat anchor on most people’s financials.
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u/the-code-father 2d ago
Objectively a house has been one of the best investments you could possibly have made over the last several decades. No bank will let your average Joe 10x leverage themselves on almost any other investment. I’ve made more money just living in my house the past few years than I have made at my job, almost tripling the down payment on it.
Not to mention the fact that it just provides a tangible sense of stability in life. Barring some very exceptional circumstances, I know how much money it’ll cost me to live here for the next 20 years and a landlord can’t decide to kick me out.
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u/Tankninja1 2d ago
One of the better ways of investing money, sure, but it’s not the best way. I’d probably only rank it 3 or 4.
Objectively the best way is any sort of tax advantaged account, especially if said account has employer match that is just an instant 50% return on your money. 401k and HSA’s are two that come to the top of my head.
2nd best way is a low cost index funds which have historically outperformed the housing market. Myself I know if I had dumped in my house downpayment at the bottom of the COVID drop and taken it out now, I would’ve had enough money to pay for the house in straight cash. Mind you that same period of the stock market going crazy was also the most movement we saw in the housing market for like 10-15 years.
Sure a landlord could decide to kick you out, but even in the most landlord friendly places that takes a few months.
And the benefit of renting is that you don’t have a house you need to sell so if you find a better paying job in a different city, or need to move for some other reason far easier to do if you rent then the months it takes to sell a home, plus most of the transaction costs come from selling a home rather than buying a home.
The whole point I’m making here is there are a lot more considerations you really should be making when it comes to buying a house. It’s really not this magic cure all that people seem to make it out to be. You’re not going to buy a house and just fix your costs into place for the next 30 years. I’d argue your month to month costs will become more volatile with a house than renting and if you don’t have your finances to a point where a $5k-$10k repair bill won’t drive you into ruinous debt, then renting is the far better option.
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u/Pierrot-Ferdinand 1d ago
South Korea is tiny and mountainous, everybody is squished into the valleys. Few people can afford to live in houses, most people live in apartments.
With Poland I think you read the chart wrong. The median house price in Poland is much lower than in America.
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u/mr_ji 2d ago
We still have it far better, even if it's worsening. The people who wanted globalism are getting it now and learning the hard way that when you're on top, the only way to go is down.
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u/HarrMada 2d ago
This has been known for a while, but people against immigration will still use it as an argument.
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u/Forsaken-Bobcat-491 2d ago
That's because having only 3 migration categories is quite coarse. Compare Aus, UK, NZ and US.
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u/rocketeerH 2d ago
Yeah it looks to me like immigration and housing prices both track with median income
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u/melanogaster 2d ago
What point are you trying to make with this plot? Color scale is not very clear. All I’m getting is that salaries and housing prices are correlated.
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u/Consistent_Log_3040 2d ago
yea i dont see how immigration fits into this would love an explanation from any data nerds here
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u/Newtoatxxxx 2d ago
This to me seems like a correlative nightmare. I would assume immigrants are less likely to move to places with lower salaries and, importantly, employment prospects. High salaries and healthy relative employment is correlated to higher median housing prices.
So which way is it? Does immigration drive median housing costs up? Have no impact? Have minimal impact at a certain level of immigration?
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u/Rauram99 2d ago
It has a small impact because it does increase the demand. But if the root of the problem is supply, changes in immigration policies/trends won't have much effect. Most countries worldwide have had a dramatic distortion in supply since the pandemic. Almost every single one in this graph has had a dramatic increase in prices and ratios too.
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u/williamjds 2d ago
I don’t think the figure lets you make any of these claims. The only thing it shows without having to do more work is that there is a correlation between salary and house prices
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u/LaBaguette-FR OC: 1 2d ago
Just use the House prices vs Median Income on the y axis — you could even include the ratio to lower and upper quartiles of the Median Income using dedicated box plots, or even density shapes if you have this data. Then use the x axis to gain granularity on the actual immigration level directly.
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u/NthHorseman 2d ago
This isn't a great way to visualise this data.
If you want to know what the correlation is between immigration and houseprice-to-income ratio, make those your axes.
Is 1:8 a particularly meaningful number? Is it the average?
What are the units for net migration? Percent population per year?
Why is the y axis in dollars and the x in millions of dollars? They could both in thousands and be within one order of magnitude.
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u/multiinstrumentalism 2d ago
Why not throw immigration on x axis since that’s what you’re trying to prove (unsuccessfully, albeit). If you run a PCA on all factors that might influence home price, immigration doesn’t crack the top 10.
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u/jmorais00 2d ago
It's almost like there's an underlying cause to both....
Like the country's level of wealth
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u/AdOk1598 2d ago
What exactly do the immigration rates mean sorry? Like what does “>3.0” mean.
This is an interesting graph. My interpretation is that immigration level plays a pretty minimal role in housing affordability. Given that 1:8 is the “standard” ratio used here. That seems to be basically telling me that housing is possibly not that much worse than it used to be. IF you are earning average or above average for your country and have two full-time incomes. If you’re missing either of those it’s worse.
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u/Rauram99 2d ago
3.0 means three new people for every 1000 inhabitants.
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u/LSeww 2d ago
new? what about total?
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u/Rauram99 2d ago
For instance, the US is at 3.2. Meaning they usually get 1.2 million new immigrants in a year.
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u/LSeww 2d ago
those immigrants aren't distributed equally, in Japan for example small towns with lower populations have super cheap prices, meanwhile Tokyo's real estate increases in value due to "immigration" from the country itself. This whole plot should be made for individual cities, not countries.
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u/AdOk1598 2d ago
Ah i see. Thankyou. What are your personal interpretations of this data?
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u/Rauram99 2d ago
High immigration countries have the highest prices and salaries. Moderate immigration countries have slightly lower prices and salaries and a slightly lower ratio. Low immigration countries have the lowest prices and salaries, but also the highest ratio.
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u/random_BA 2d ago
the basic interpretation would be that high immigration causes more higher prices, but I think a more accurate one its countries with greater economy push salaries and prices higher and attracts more people from outside
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u/Doxonvic 2d ago
My interpretation is that immigration level plays a pretty minimal role in housing affordability.
I don't know. To get to this point maybe we should see a graph showing the same countries over the years. Like, the housing affordability from the UK from the 80'S/90's to the present. maybe it's getting worse, maybe the same...
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u/nethead25 2d ago edited 2d ago
It seems like you're trying to draw causation from loosely correlated indicators.
It seems logical that higher relative salaries would drive higher housing prices in most markets. So the correlation between the X and Y axis seems obvious, and it's interesting to see where things fall on either side of the 1:8 ratio line, I think.
I'm not sure how much immigration levels fit in though... most immigration is economic and therefore the countries offering the highest salaries generally see the highest immigration levels. And high salaries generally would mean a tighter labor market, again, incentivizing more immigrants. But it doesn't seem to add anything to the conversation about housing prices.
What is missing from understanding anything about housing prices is housing supply growth and policy relative to net migration and birthrates.
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u/david1610 OC: 1 2d ago
Exactly this is the best response in the comments so far.
I suspect higher incomes are the main driver for higher immigration and higher house prices generally, although that cannot be stated as fact from a correlation.
However as you said the interesting thing would be comparing countries either side of the correlation and identifying any policy decisions that relate to it.
For example, I know for a fact that Australia and NZL have very favourable capital gains tax concessions on housing and they are in the 'heavily zoned' list of countries. So limited supply with heightened demand is the obvious issue, I also know that NZL concessions on tax are even higher than Australia. Canada has similar issues just not as pronounced.
What about Israel? Don't know too much about it however it might not be similar reasons to Australia and NZL, given how unique the country is.
South Korea? Not sure, however with their population I wouldn't think that affordability will continue into coming decades.
US France and Germany have relatively affordable housing in comparison. I think this is almost entirely tax, zoning and the release of land. US has some states that allow lots of housing which helps the national statistics, France has generally higher taxes and Germany is a mix of both throwing in more factory homes too which help a bit.
There is also the question of density, in Australia, US and NZL suburbs dominate housing. While in France it has more medium density.
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u/phyrros 1d ago
most immigration is economic and therefore the countries offering the highest salaries generally see the highest immigration levels.
Because most immigration in europe isn't economic, which is one of the big differences between eg us/can/aus/nz and europe.
For example for my country (austria) : aside of schengen the biggest migration in the last 3 decades was yugoslawia, Chechnya, Afghanistan, iraq, syria, Sudan and most of them fur humanitarian reasons
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u/Radical_Coyote 2d ago
Having lived abroad, I feel like USA salaries are inflated. When you factor in healthcare costs and the fact that cars/insurance are mandatory, a 60k salary in the US feels like a €30k salary in France
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u/BotswanaEnjoyer 2d ago
well I guess if prices are 2x higher in the US accross the board that would be true. I don’t think they are though
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u/Radical_Coyote 2d ago
Not across the board, but in many of the ways that isn’t actually what matters. It’s basically mandatory to spend ~$500/month for car payments/gas/insurance/maintenance if you want a halfway reliable car, which is basically mandatory in the USA. In France it’s perfectly possible to have equivalent mobility for $10/week in transit fare. Health insurance premiums for a family plan averages $800/month in the US, compared to $0 in France. So if you’re trying to live a bare minimum standard of living, there’s already over $15k difference between France and the US for lifestyle and legal differences before you even begin to talk about prices. Then of course prices are lower in France for things that matter, like housing and groceries, even if prices are higher for things that don’t matter like electronics, plastic knickknacks, and fast fashion
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u/FormerOSRS 11h ago
United States GDP per capita is $89,110.
French GDP per capita is $46,792.
The gap between the countries is $42,318.
If we take your number at face value and say that an American has to pay $15,000 more to basically get by then that still has America coming out $27,318 ahead.
France and the US for lifestyle and legal differences before you even begin to talk about prices. Then of course prices are lower in France for things that matter, like housing and groceries
It's a way more mixed bag than you're making it out to be. France is cheaper for grain and dairy, US is cheaper for meat. US also tends to have bigger houses that make sense to cost more.
If we get past the cherry picking, the IMF has the French purchasing power parity per capita at just under $66k and the US at just over $89k so even when accounting for prices, the average American can afford almost a third more shit than the average Frenchman can.
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u/Tropink 2d ago
Housing in the USA is more affordable than in places like Poland and Portugal? That’s actually insane.
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u/FromZeroToLegend 2d ago
It gets even worse if you travel to Poland and realized how small everything is compared to the states. Source: I’ve been here for the past 3 years now
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u/ThomasHL 1d ago
The USA is only moderately densely populated compared to many other countries. The houses in the US are way bigger than elsewhere too
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u/mrpaninoshouse 2d ago
This is good data although maybe rate of change in home price would be a better way to assess the effect of immigration. Anglo countries have high rates of home price growth and immigration
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u/throwaway92715 2d ago
It's not great to compare at the national scale as many modern nations have a strong urban-rural divide.
Better to compare the major cities of any given nation, or the typical small town of any given nation.
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u/realtalkradar 2d ago
I think the Median Annual Salary variable should be on the x axis and make the Median House Price the dependent variable.
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u/Will_Not_Comment_ 2d ago
This would seem to imply that US house prices are actually underpriced relative to other major economies, which is wild is true.
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u/Neither-Historian227 2d ago
I never bought the argument low income, male workers from a 3rd world working at Tim Hortons, Walmart, Costco, etc. led to the massive housing appreciation.
It's money printing
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u/curt_schilli 2d ago
Maybe I’m dumb but why would you not put immigration levels on one of the axes and home price as a percent of median income on the other?
At first glance I thought this showed a correlation with immigration and house prices, but now I realize I should be looking at the colors of the dots and it’s very hard to see if there’s an actual correlation there.
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u/travelcallcharlie 2d ago
I think your axis are the wrong way round. You’d really want the dependent variable on the Y axis.
Also what’s your 1.8 ratio line? Did you just pick a number or did you build some statistical model? Likewise what are the dotted lines?
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u/snakesoup88 2d ago
For some reason, I assumed below the solid line is better. Then I saw Canada and Australia. Based on how much they complained about home un-affordablity, I knew my assumption is wrong.
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u/chandy_dandy 2d ago
My recommendation would be to actually convert this to just a multiplier of annual salary pre-tax including benefits versus median housing price and then represent immigration on a continuous scale.
the lower the multiplier => the better for affordability, set x-axis to immigration levels then the correlation will either fall out obviously or not
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u/deymanator40 2d ago
So people dont immigrate a much to countries with lower average incomes as much as they do to countries with higher average incomes.
Huh.
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u/Ifnerite 1d ago
This is the best demonstration of correlation not being causation I have ever seen. The only sensible conclusion is THE OPPOSITE of what is being implied.
People want to integrate into more prosperous places.
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u/Asleep_Secret_6147 20h ago
I’m interested in the 1:8 ratio that is used. Wonder if this has been consistent over time/decades? Does it correlate to other factors?
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u/azzers214 2d ago
What's with AUS btw? Chinese/American expats? Just lack of land? (Obviously this has nothing to do with the data presentation).
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u/Tropink 2d ago
Lack of land is an insane thing to say, Australia has to have one of the lowest population densities. I’m not Australian but my best guess is the extreme house regulations and zoning laws that plague the Anglosphere.
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u/TheBigPhallus 2d ago
A lot of land actually isn't that arable. And for example Sydney is surrounded by mountains, national parks and flood plains, so Sydney is actually quite limited with space.
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u/Tropink 2d ago
You don’t need to build housing on arable land, you can import food, especially when you’re as rich as Australia is, and you can always just build new cities.
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u/Walking_billboard 2d ago
Do you want to live off-grid in the desert? No? Neither do most people in Australia.
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u/Tropink 2d ago
You know you can build grids right?
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u/Walking_billboard 2d ago
What is your point? You can buy an acre of land in West Texas for $100. HOUSING CRISIS SOLVED.
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u/Tropink 2d ago
Texas is actually building a shitton of housing, you know that right? That's why home prices are going down in Texas even with its population skyrocketing, while still rising in places like California and New York (and apparently Australia) where regulation and zoning laws have made building housing impossible.
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u/Walking_billboard 1d ago
What in the world is your point? Texas is building housing, but not the wasteland desert. You made an asinine comment about Australia how can "just build new cities". As if that was an easy or straightforward solution. It isnt.
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u/azzers214 2d ago
You're arguing with him but this is more or less what I meant by lack of land. American cities have a similar phenomenon where "lack of land people actually want" doesn't mean lack of land.
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u/craig-jones-III 2d ago
Soo countries that have a lot of money and high house prices allow immigrants? Or are you trying to say lax immigration promotes high salaries and home costs?
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u/cantonlautaro 2d ago
I dont understand how Chile is "low immigration". Immigration is booming, and upsetting Chileans.
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u/Rauram99 2d ago
It's still below 1.0 (less than 190,000 a year). Net migration is total of people immigrating minus total of emigrating.
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u/OrinThane 2d ago edited 2d ago
Are you using a ratio of the (countries population - emigration) / new immigrants or absolute number of immigrants - emigrants? Because the perception of immigration is HEAVILY tied to the proportion of your country that is "new".
With this number you would be able to plot the effect of immigration as a matter of its verifying effect on a housing market (Density of effect). Right now this data seems meaningless because it doesn't account for this.
Additionally, with this number you can also be more discerning within the context of a country. If you know a county is more likely to be immigrated to and has a pop similar to another that is not, you can compare two like things to find difference.
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u/Rauram99 2d ago
Sources: Numbeo, OECD, World Bank (2023-2024)
Done with python: https://colab.research.google.com/drive/1OfgnSMIp5doRz6LE5-OWyR5NPYCDRT-9
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u/HarrMada 2d ago
What data exactly did you pull from Numbeo? Because that hellscape is as far away from a reliable source as you can go.
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u/TukkerWolf 2d ago
Probably immigration, because no way the Netherlands isn't a high immigration country.
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u/hraath 2d ago
The color axis here is difficult to really get a summary on. Is there a cor or cov between immigration and price/income ratio?