Real estate mogul rips ‘no concerted political focus’ to build more affordable housing
Cain International CEO says US housing market showing ‘really nervous signs’ after new home construction drops to 9-month low
One real estate investor is calling out bureaucratic regulation and red tape for hampering the housing market and creating a "very nervous situation."
"There has been a lack of concerted governmental effort across all Western Europe, Western economies, for decades to ensure that there is a sufficient supply of affordable housing," Cain International CEO Jonathan Goldstein said on "Mornings with Maria" Wednesday.
"What they've done is they put blockages and regulatory and red tape problems in front of developers, and there is no concerted political focus on this as a problem, and be that from the right or be that from the left, the same problem," he continued.
The property developer admitted the market is showing "really nervous signs" after new home construction in the U.S. hit a nine-month low in June, dropping 2% from May.
MORTGAGE APPLICATIONS SINK DESPITE CONTINUED DECLINE IN RATES
"I am very concerned," Goldstein noted. "I think we should be concerned because we're seeing a storm where there is a shortage of supply. We're seeing inability for people to get on the ladder because mortgage rates are increasing and it's more expensive for people."
Rising rental rates, with some areas like Manhattan and Miami seeing double-digit returns, also derive from the "same story" of a housing supply shortage, according to the real estate expert.
Goldstein also argued the low housing inventory provides a "great opportunity" for lawmakers to help bring more supply to the market.
"We need encouragement from governments and we need encouragement from central banks, and they need to understand that it's not just interest rates," the CEO said. "We have to be thinking wider than that, how to deal with these issues in the economy."
The expert further argued that the real estate market has entered an unsustainable environment as compared to one year ago.
"That's a 50% rise in people's mortgage rates during a time when they can least afford it because they're experiencing nearly double-digit inflation across all their household goods that they're buying. So if they can't afford their mortgages and they can't afford their household supplies, something has to give," Goldstein explained.
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He also called for more sensible and sophisticated approaches to solving the housing supply shortage.
"I'm so nervous about the lack of policy coming out from central banks and from governments across the world," Goldstein said. "We as businesspeople have a responsibility to ensure that there is sufficient supply for people to live in."