[OC] Housing prices and salaries - Three immigration levels (2023-2024)

[u/Rauram99]

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.

[u/nethead25]

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.

[u/david1610 → u/nethead25]

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.

[u/phyrros → u/nethead25]

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