The Housing Shortage Timebomb

dgl1001

Sir_Humphrey wrote: »

It is perfectly clear that I am not saying that.

so your sole argument that prices will not rise in the future is down to demand deconstruction? is that it?

Sir_Humphrey

dgl1001 wrote: »

so your sole argument that prices will not rise in the future is down to demand deconstruction? is that it?

No.

Prices too high relative to wages.
Credit markets permanently tightened.
IRs will rise at some point leading to more forced selling.
Suppressed wages.
Tighter lending criteria.
Lower income multiples for mortgages.
Higher deposit requirements for mortgages.

And in any case, it is the Bulls who have to provide the evidence in favour of further prices rises. It is logically impossible to prove a negative, but I am sure you realise that.

chucky

prices are fine in relation to wages - check the affordability indexes. granted they've been more affordable but it's only those that can't afford are the ones that can't buy property

70% of the property is owner occupied - it looks like it's the minority that can't afford.

Really2

Cleaver wrote: »

I know a builder called Dave who'd sort it for you. He's like lightning.

Unpredictable, only seen occasionally and dangerous on a golf coarse.

bernard_shaw

I think it's great that hamish is pedaling this 'shortage crisis' line.

The more the perception of 'shortage' in the minds of policymakers in their ivory towers; and the more the perception of 'shortage' in the minds of housebuilders with their large land-banks, the greater the likelyhood of an eventual misallocation of capital leading to oversupply and glut.
:money:

Cheapo houses here we come!

dgl1001

Sir_Humphrey wrote: »

No.

Prices too high relative to wages.
Credit markets permanently tightened.
IRs will rise at some point leading to more forced selling.
Suppressed wages.
Tighter lending criteria.
Lower income multiples for mortgages.
Higher deposit requirements for mortgages.

And in any case, it is the Bulls who have to provide the evidence in favour of further prices rises. It is logically impossible to prove a negative, but I am sure you realise that.

OK - I understand now. You only focus functions of demand and ignore supply, which has been covered at the start of this thread. Even my basic "A - Level" understanding of economics, I know you need to understand both sides of the argument.

chucky

bernard_shaw wrote: »

I think it's great that hamish is pedaling this 'shortage crisis' line.

he does have a point though but maybe he doesn't realise it

there isn't a housing shortage.

but there is a housing shortage of quality houses in quality areas

abaxas

chucky wrote: »

he does have a point though but maybe he doesn't realise it

there isn't a housing shortage.

but there is a housing shortage of quality houses in quality areas

But that is like saying..

There is a shortage of cars becasue there isnt enough E class mercs for everyone.

chucky

abaxas wrote: »

But that is like saying..

There is a shortage of cars becasue there isnt enough E class mercs for everyone.

no, you can only have a certain of quality houses in a nice area unless you build them on top of each other and then it doesn't become such a nice area....

you can't live in an E class Mercedes - well you can but there isn't anywhere to put a decent sized plasma

Sir_Humphrey

dgl1001 wrote: »

OK - I understand now. You only focus functions of demand and ignore supply, which has been covered at the start of this thread. Even my basic "A - Level" understanding of economics, I know you need to understand both sides of the argument.

No, I have already said that supply explains some of the rises, but not enough to explain the rise since 2000. If there was simply not enough housing to go round, then rents would have increased which has not happened, particularly at the bottom of the market (HMOs) where most recent immigrants live. People living in HMOs is another example of demand destruction.

Supply of housing is far less elastic than demand - it is easy to consume less housing. It is therefore more likely that demand is going to determine short-medium changes in prices.

Supply explains why housing is more expensive in the UK than most of the USA - this was the case in 2007 before the crash and was also true in 1999. What it does not explain is short term changes in price (I consider the period of ten years to a short period of time in a slow moving and illiquid market such as housing).