Post by account_disabled on Mar 12, 2024 0:49:55 GMT -5
The Institute of Economic Studies (IEE) has put the housing market as an example of the negative effects that interventionist measures have on the market.
As detailed by the CEOE think tank in a study on economic and business freedom in Spain compared to other developed countries, "the market never reaches a perfect balance, but it does continually tend towards the search for more efficient production formulas." , so its operation should not be substantially and recurrently altered. However, the interventionist drive makes public powers insist on directing business activity for one purpose or another, which can end up deforming, altering and even breaking the processes inherent to the market economy. Let us think, for example, of regulations aimed at controlling rental prices." Some limits included in the Housing Law that came into force at the end of May and that would affect properties located in areas with stressed prices.
The institute, chaired by Iñigo Fernández Cambodia Telegram Number Data de Mesa, recalls that limiting the increase in rental prices "seems, a priori, a simple way to solve the problem of access to housing. However, this type of intervention has side effects that are devastating long-term".
Among them, as summarized in the document, the brake on the development of new construction housing stands out, " since the operators understand that they will not be able to manage their assets in accordance with market conditions, which generates a scenario of shortage of living place".
Added to this is the possibility that many owners choose to sell their home instead of renting it , "understanding that liquidating the asset is more profitable than keeping it in a hyper-regulated market, which will also contribute to exacerbating the shortage problem."
On the other hand, the IEE also states that "it is expected that owners who continue renting their homes will reduce their levels of investment in routine conservation and improvement work on the properties, which will result in less well-maintained apartments and houses, with lower efficiency." energetic, with outdated design and furniture, etc.
Add up and continue, because another of the effects that rent caps can have, according to the institute, is that, "to get around the cap, there are owners who will take their home off the market for a time and then proceed to rent it at a lower price. much larger, aimed at cushioning the limits that will affect the annual review of the rental cost.
Finally, the employers' think tank warns that price intervention " can encourage the development of the underground economy , since some owners can agree with their tenants to disburse undeclared payments aimed at compensating for the official limitation of the price.
As detailed by the CEOE think tank in a study on economic and business freedom in Spain compared to other developed countries, "the market never reaches a perfect balance, but it does continually tend towards the search for more efficient production formulas." , so its operation should not be substantially and recurrently altered. However, the interventionist drive makes public powers insist on directing business activity for one purpose or another, which can end up deforming, altering and even breaking the processes inherent to the market economy. Let us think, for example, of regulations aimed at controlling rental prices." Some limits included in the Housing Law that came into force at the end of May and that would affect properties located in areas with stressed prices.
The institute, chaired by Iñigo Fernández Cambodia Telegram Number Data de Mesa, recalls that limiting the increase in rental prices "seems, a priori, a simple way to solve the problem of access to housing. However, this type of intervention has side effects that are devastating long-term".
Among them, as summarized in the document, the brake on the development of new construction housing stands out, " since the operators understand that they will not be able to manage their assets in accordance with market conditions, which generates a scenario of shortage of living place".
Added to this is the possibility that many owners choose to sell their home instead of renting it , "understanding that liquidating the asset is more profitable than keeping it in a hyper-regulated market, which will also contribute to exacerbating the shortage problem."
On the other hand, the IEE also states that "it is expected that owners who continue renting their homes will reduce their levels of investment in routine conservation and improvement work on the properties, which will result in less well-maintained apartments and houses, with lower efficiency." energetic, with outdated design and furniture, etc.
Add up and continue, because another of the effects that rent caps can have, according to the institute, is that, "to get around the cap, there are owners who will take their home off the market for a time and then proceed to rent it at a lower price. much larger, aimed at cushioning the limits that will affect the annual review of the rental cost.
Finally, the employers' think tank warns that price intervention " can encourage the development of the underground economy , since some owners can agree with their tenants to disburse undeclared payments aimed at compensating for the official limitation of the price.