Residential property effects
The big advantages of reducing global population
One of the big advantages of reducing the world population is to reduce demand, especially on property and the price first home buyers have to pay. The thought that the home you have bought may be worth less because of the demand, does not sound like an attractive proposition . We have been used to property prices increasing over many years and providing most property owners with a secure and productive investment that is tax free.
In my vision for a sustainable planet where we have to think of less not more, we also have to rethink what we are trying to achieve for the benefit of all mankind.
How we can achieve this
It would be relatively simple, although not attractive to achieve this with property prices. How could this be achieved without putting the owner and the mortgagor at risk?
Take a property that has been bought by a first home buyer for $800,000. Typically the purchaser may have borrowed $720,00 and put down a deposit of $80,000.
At present, the property owners would hope the investment in their home would increase and they can either pay off their mortgage or sell the home in the future and pay off the mortgage and move into something smaller.
If we proceed on the basis of less, not more, supply will out strip demand and property prices will gradually fall over a much longer period than the life of the average mortgage.
As prices reduce, so will the mortgage. If the value of the property reduced by half over a period of one hundred years, that could likely be absorbed by three or four owners over that period.
The mortgage company would be more than covered by the repayments out stripping the residual value of the property. The property owner would still have some collateral when the property was sold and there may be some scope for a tax deduction on the reduced value of the property.
The property market would become affordable once again and there would be , not only more properties on the market to buy, but also to rent. The market would stabilise once the world population stabilised.
“We have to change our way of thinking, if we want to have a sustainable planet well into the future.”
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