Self-build: Should people build their own homes?

shortchanged_2

HAMISH_MCTAVISH wrote: »

In all seriousness Shortchanged, as much fun as this back and forth can be, can you just take a step back and think about the following....

If we only build 35% of the houses we need, as is happening today, then what percentage of the population need to be able to afford to buy them for prices to rise?

Yes but come on Hamish, when will you accept that the banks loose lending of the past decade has also helped seriously ramp up house prices.

If the banks would not have lent the money that they did back then, (i.e maintained strict lending criteria) people would not been able to pay the ever increasing prices whether they wanted to or not and it would have put a lid on the HPI. If they pulled the reigns in then, we wouldn't have the such affordability issues (earnings to lending multiples) we have now.

HAMISH_MCTAVISH

shortchanged wrote: »

Yes but come on Hamish, when will you accept that the banks loose lending of the past decade has also helped seriously ramp up house prices.

If the banks would not have lent the money that they did back then, (i.e maintained strict lending criteria) people would not been able to pay the ever increasing prices whether they wanted to or not and it would have put a lid on the HPI. If they pulled the reigns in then, we wouldn't have the such affordability issues (earnings to lending multiples) we have now.

That's seriously not the case.

The average multiple of actual buyers, even at peak, never crossed 3.5 times income.

And I ask again, If we only build 35% of the houses we need, as is happening today, then what percentage of the population need to be able to afford to buy them for prices to rise?

HAMISH_MCTAVISH

And getting back to that anecdotal about your parents house, once again, why would you not expect the price to rise above inflation when population has been rising faster than we build houses to put them in?

If in your parents day there were 100 buyers for every 100 houses in that area, prices would be stable.

If there were 105 buyers for every 100 houses in that area, prices would rise slowly until the bottom earning 5 were priced out.

If there are now 110 buyers for every 100 houses in that area, prices will rise until the bottom earning 10 are priced out.

Why do you think it should be any other way? How else do you propose the market allocate scarce resources?

And why, given the overwhelming and indisputable evidence of the critical housing shortage we have, would you not believe that is the primary reason for prices rising?

shortchanged_2

HAMISH_MCTAVISH wrote: »

And getting back to that anecdotal about your parents house, once again, why would you not expect the price to rise above inflation when population has been rising faster than we build houses to put them in?

If in your parents day there were 100 buyers for every 100 houses in that area, prices would be stable.

If there were 105 buyers for every 100 houses in that area, prices would rise slowly until the bottom earning 5 were priced out.

If there are now 110 buyers for every 100 houses in that area, prices will rise until the bottom earning 10 are priced out.

Why do you think it should be any other way? How else do you propose the market allocate scarce resources?

And why, given the overwhelming and indisputable evidence of the critical housing shortage we have, would you not believe that is the primary reason for prices rising?

Hamish, I am not disputing that lack of supply will push up prices, but what I am saying is that the banks certainly made matters worse by lending ever larger amounts.
There is no way wages increased in line with house prices over the same period, so the question has to be asked how the hell did people suddenly come to be able to 'afford' to pay the prices?