Why house prices are such an emotive issue....

HAMISH_MCTAVISH

Forever wrote: »

But as we move futher into full globalisation and need to compete with folks in other countries where wages and properties are much, much lower than ours, we will then be scr*wed.

You can't compete with a Chinaman on $1 a day no matter how cheap the house.

So that entire premise is flawed.

We cannot compete with cheaper wage societies, and should not even try.

America with their cheaper housing is already in a much better position than us.

Nonsense.

Think about it, the only way lowering the cost of housing benefits competitiveness is if it also feeds through into lower wages. But lowering house prices does not do that. The only thing which does that effectively is increased unemployment. Which creates a lack of pressure for wage rises, and over time reduces income in real terms.

And making us all poorer is not a strategy for success in the world.

There will always be someone out there willing to build it cheaper, or work longer hours for less money.

We will only succeed by innovating, creating, and focusing on areas where cheap labour gives our competitors no advantage.

The "Knowledge economy" in other words.

Intellectual property, creative industries, professional services, education, legal, high end engineering, biotech, life sciences, design, etc etc etc.

Trying to make mass consumer goods cheaper than someone else is a recipe for disaster.

Forever

HAMISH_MCTAVISH wrote: »

You can't compete with a Chinaman on $1 a day no matter how cheap the house.

So that entire premise is flawed.

We cannot compete with cheaper wage societies, and should not even try.



Nonsense.

Think about it, the only way lowering the cost of housing benefits competitiveness is if it also feeds through into lower wages.

And making us all poorer is not a strategy for success in the world.

There will always be someone out there willing to build it cheaper, or work longer hours for less money.

We will only succeed by innovating, creating, and focusing on areas where cheap labour gives our competitors no advantage.

The "Knowledge economy" in other words.

Intellectual property, creative industries, professional services, education, legal, high end engineering, biotech, life sciences, design, etc etc etc.

Trying to make mass consumer goods cheaper than someone else is a recipe for disaster.

But we still need to be competitive. And housing in China in urban areas are no longer cheap. They are a growing economy!

Anyway, if we want to focus on a more specialised economic stream, how can we compete economically with say, America if their housing and all costs associated with it, is much lower than ours? And it looks like Europe is swiftly on the American's heels too.

HAMISH_MCTAVISH

Forever wrote: »

Anyway, if we want to focus on a more specialised economic stream, how can we compete economically with say, America if their housing and all costs associated with it, is much lower than ours? And it looks like Europe is swiftly on the American's heels too.

But lowering house prices does not do that.

The only thing which does that effectively is increased unemployment. Which creates a lack of pressure for wage rises, and over time reduces income in real terms.

You're arguing this back to front.

Falling house prices do not reduce wages, only increasing unemployment will do that, which may then reduce house prices assuming there isn't a shortage, or at least will reduce house price increases if there is a shortage.

And again, you've yet to explain why you think increasing unemployment and making us all poorer is a good thing?

We make Rolls Royce cars in the UK, and we don't need to compete with low wage workers at Kia or Hyundai or Chevrolet or Dodge to be successful at it.

Our future is not in mass producing cheap tat.... So a low wage economy is not to be desired.

ILW

Rents can be decreased by statute. It has been done before.

HAMISH_MCTAVISH

ILW wrote: »

Rents can be decreased by statute. It has been done before.

Was there a point to that post?

ILW

HAMISH_MCTAVISH wrote: »

Was there a point to that post?

Just pointing out that reducing wages is not he only way of reducing rents.

Forever

HAMISH_MCTAVISH wrote: »

But lowering house prices does not do that.

The only thing which does that effectively is increased unemployment. Which creates a lack of pressure for wage rises, and over time reduces income in real terms.

You're arguing this back to front.

Falling house prices do not reduce wages, only increasing unemployment will do that, which may then reduce house prices assuming there isn't a shortage, or at least will reduce house price increases if there is a shortage.

And again, you've yet to explain why you think increasing unemployment and making us all poorer is a good thing?

We make Rolls Royce cars in the UK, and we don't need to compete with low wage workers at Kia or Hyundai or Chevrolet or Dodge to be successful at it.

Our future is not in mass producing cheap tat.... So a low wage economy is not to be desired.

Why can't the government 'invest' in building more housing, stop our tax money subsidising ftb mortgages and taxing people who own more than one property? These actions alone will create jobs whilst lowering house prices overall.

Then there is also the thought of the amount of people who would no longer need tax credits to keep a roof over their head because their wages aren't high enough to pay for it.

And our housing benefit bill will go down too.

And we will be able to compete on a global economical scale. If we can't do this last point, we are scr*wed anyway!

HAMISH_MCTAVISH

Forever wrote: »

Why can't the government 'invest' in building more housing, stop our tax money subsidising ftb mortgages and taxing people who own more than one property? These actions alone will create jobs whilst lowering house prices overall.

Then there is also the thought of the amount of people who would no longer need tax credits to keep a roof over their head because their wages aren't high enough to pay for it.

And our housing benefit bill will go down too.

And we will be able to compete on a global economical scale. If we can't do this last point, we are scr*wed anyway!

You still haven't answered why you think making us all poorer is a good thing.

Nor have you addressed the point that only higher unemployment over the long term will bring down wages, not cheaper house prices.

So I'm left with no choice but to assume you really don't understand what you're talking about, but are just repeating some story you heard as to why crashing house prices might be a good thing.

ILW

HAMISH_MCTAVISH wrote: »

You still haven't answered why you think making us all poorer is a good thing.

Nor have you addressed the point that only higher unemployment over the long term will bring down wages, not cheaper house prices.

So I'm left with no choice but to assume you really don't understand what you're talking about, but are just repeating some story you heard as to why crashing house prices might be a good thing.

Not necessarily true, see above.

HAMISH_MCTAVISH

ILW wrote: »

Not necessarily true, see above.

Have you been drinking?