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Debate House Prices
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Why exactly are houses so expensive?
Comments
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What happened to the supply and demand argument? Was the case I put forward in my earlier post so conclusive that everyone has agreed? If that's the case then surely there is nothing left to argue about? Prices of any commodity go up when demand increases. Quod erat demonstrandum.0
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Eellogofusciouhipoppokunu wrote: »What happened to the supply and demand argument? Was the case I put forward in my earlier post so conclusive that everyone has agreed? If that's the case then surely there is nothing left to argue about? Prices of any commodity go up when demand increases. Quod erat demonstrandum.
According to that article 1.5m people lived alone compared to 7m in 2002 probably higher now so that’s quite a bit of extra demand.
7.7m in 2011 according to ons0 -
According to that article 1.5m people lived alone compared to 7m in 2002 probably higher now so that’s quite a bit of extra demand.
7.7m in 2011 according to ons
That's only half the story, these single people won't necessarily live in studio apartment or 1 bed houses. If the kids live with Mum in a family house, Dad might also own a family house for when the kids stay over at the weekend/evenings or holidays. Grandparents will be the same if they split (which was unheard of a generation or so ago) and have additional spare bedrooms for their children and Grandchildren.
Demand isn't just population increase, its society change. Until we have enough housing to meet the demand, house prices will remain high. It's one of the indisputable facts of life and any house price discussion that does not include supply and demand is just tinkering on the edges.
Should anyone need proof they need just look at the countries that have seen large drops, they all have over supply of housing in common.0 -
I think it's a mixture of supply/demand and available credit. The biggest factor recently would have been the massive increase in credit - if banks didn't borrow on wholesale markets and then lend it to us we wouldn't be able to bid house prices ever higher. But that doesn't explain why rents [in London] are spiking. So... minimum 25% deposits to anchor house prices to wages? And lots of nice flats to be built [in London]? We'd all be better off if housing cost less right?0
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Car loan consumption hasn't seen the price inflation in cars we have in property, why?
I'd argue it's because property is so desirable. For example more and more people turned away from traditional savings and pensions (as those Pru sponsered bi-annual 'news' articles attest to), in favour of investing what ever it took in aquiring thier residence, with landlords adding further demand.0 -
Car loan consumption hasn't seen the price inflation in cars we have in property, why?
because there is a highly competitive global industry which doesn't need planning permission to build a car and sell it to you, and can choose to construct that car anywhere in the world and ship it to you?0 -
The ONLY reason house that properties have become expensive is because of easy credit lending...you only have to reduce that to see whether it's true..oh look we do have the luxury of testing that theory using the last few years bank lending.
To summarise...provide easy credit...house prices go up...stop lending house prices stop rising...that was easy. NEXT!0 -
Well, it's official (not!). I have just spent time in 3 of my sisters' houses over here in Canada. Every single one of them is much bigger than my UK home, which isn't exactly small by UK standards.
Let's face it. Not only do we pay through the nose for property, we also don't get a lot for our money. Pokey show houses with 3/4 size furniture try to conceal the truth.
If people are unable to climb housing ladders in the future, then property needs the capacity to extend/expand. This will help multi-generational living in the same homes, something which will help ease the care costs for our elderly.
Maybe a 25 year mortgage is too short. What about 50 year+ for larger more flexible homes?0 -
The ONLY reason house that properties have become expensive is because of easy credit lending...you only have to reduce that to see whether it's true..oh look we do have the luxury of testing that theory using the last few years bank lending.
To summarise...provide easy credit...house prices go up...stop lending house prices stop rising...that was easy. NEXT!
What makes house prices go down?0 -
Eellogofusciouhipoppokunu wrote: »What makes house prices go down?
High volume of repossessions.:(0
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