50% house price crash does not = more affordable homes

buglawton

Germans already enjoy 50% more living space than us per person. They're building more because they like it that way, at this rate they'll be having 100% more. Who doesn't enjoy indoor space for hobbies, home office, pets, kids not having to share bedrooms, etc etc.

phillw

GreatApe wrote: »

Rents will fall towards zero (above maintenance and repair) over time

That is impossible, unless we switch to a socialist or communist model.

westernpromise

buglawton wrote: »

Germans already enjoy 50% more living space than us per person. They're building more because they like it that way, at this rate they'll be having 100% more. Who doesn't enjoy indoor space for hobbies, home office, pets, kids not having to share bedrooms, etc etc.

Germany's population is declining, and most rented property there is in large blocks in which the tenant provides the kitchen and bathroom. When a block is sold the landlord gets to write the purchase price off as depreciation against tax, so it generates lots of cash but very little taxable profit. There are far more differences than similarities between the UK and Germany.

AG47

GreatApe wrote: »

Rents will fall towards zero (above maintenance and repair) over time

We are in a period where the world has a true shortage of homes.
10 billion humans will need 5 billion good quality homes
There are some 3 billion okay homes in the world
Another 2 billion need to be built over the next 40 years
By far the world's biggest infrastructure projects is building homes

The current build rate is about 500 million a decade so we are on track.
This is the biggest amazing factor of free markets. Hosting the poor at a rate unheard of

Anyway at some stage we will have enough homes but we won't stop building new homes
So existing second hand homes will sell at a discount a big discount Vs new homes
This is already the case in some countries eg like Turkey which has a very high build rate (about 800,000 units a year Vs 200,000 a year in the UK) a new house might cost X while a second hand one which may only be 20 years old costs about 0.6x so 40% off

This will be true in a lot of the EU soon as their populations fall

If Germany shrinks from 82 million to 75 million over 30 years and they build an additional 6 million net homes. She will end up with something approaching 48 million homes for 75 million people. That's a huge oversupply. Homes would be relative to incomes and wealth, very affordable! Excluding children that's just 1.25 adults per property. Or rather 4 out of 5 German homes will only have one adult living in them probably just alone by themselves

The UK and London won't face this problem
We could allow continued immigration and avoid this date for a long time

You are looking at it the wrong way around. It doesn’t matter how many people want to live in a certain home, or how many homes there are. For true supply demand fundamentals you have to look at how many can afford the current price of said homes.

In a refugee camp there is a huge shortage of homes, your think each tent or shack would be worth many more times current value, but all that matter is how many can afford the asking prices.

GreatApe

phillw wrote: »

That is impossible, unless we switch to a socialist or communist model.

Well I suspect we will in the not too distant future have worker droids which will do all the jobs these will be owned by the state and or communally owned in some form.

1 billion droids doing all the work to keep 10 Billion humans in relative luxury

At that point pretty much everything is 'free' including homes and 'rents'

lisyloo

AG47 wrote: »

You are looking at it the wrong way around. It doesn’t matter how many people want to live in a certain home, or how many homes there are. For true supply demand fundamentals you have to look at how many can afford the current price of said homes.

People will do anything to get a roof over their heads, so other parts of their budget will get sacrificed first, but IF there were mass unemployment then yes prices would find a lower level.

Due to it now being a global market, there being pent up demand and net immigration, I think you’ll find it remarkably resilient.

Prices are still rising and that’s with only 3 months to go to no deal.
It’s a lot more resilient that I thought.

RelievedSheff

GreatApe wrote: »

Well I suspect we will in the not too distant future have worker droids which will do all the jobs these will be owned by the state and or communally owned in some form.

1 billion droids doing all the work to keep 10 Billion humans in relative luxury

At that point pretty much everything is 'free' including homes and 'rents'

What drugs have you been on today :rotfl::rotfl::rotfl:

lisyloo

GreatApe wrote: »

Well I suspect we will in the not too distant future have worker droids which will do all the jobs these will be owned by the state and or communally owned in some form.

1 billion droids doing all the work to keep 10 Billion humans in relative luxury

At that point pretty much everything is 'free' including homes and 'rents'

We aren't even selling robot vaccuum cleaners to the mass market !!

Malthusian

AG47 wrote: »

You are looking at it the wrong way around. It doesn’t matter how many people want to live in a certain home, or how many homes there are. For true supply demand fundamentals you have to look at how many can afford the current price of said homes.

By definition only one person can afford the current price of any home. Everyone else got outbid by the price that person offered.

In some cases the "price" includes a non-monetary element. If a house is offered for £200,000 and two people turn up at a seller's door waving £200,000, the seller may decide to sell it to the first one because they're on a shorter chain. The second person couldn't afford the house. They needed to offer more money to overcome the deficit of non-monetary material they were offering, and they didn't have it. The non-monetary element can even be pure bad luck, the equation is the same. One person can afford every house, or every other unique asset.

Every house is affordable as if it wasn't affordable, the price would have been lowered until someone bought it.

House prices are where they are because they are affordable. If they were unaffordable they would be lower. The only reason they aren't higher right now because that would be unaffordable (but next week it will be). The fact that some people would like to be able to afford a nicer house without earning more money is neither here nor there.

Demand for a refugee tent is zero as nobody pays to live in a refugee camp. Any refugee with money uses it to get out. Demand is measured in £s, not people.

GreatApe wrote: »

Well I suspect we will in the not too distant future have worker droids which will do all the jobs these will be owned by the state and or communally owned in some form.

1 billion droids doing all the work to keep 10 Billion humans in relative luxury

At that point pretty much everything is 'free' including homes and 'rents'

Does this mean you've given up on the AI Singularity occurring in the next 20 years and have now decided that non-superhuman robots will achieve the same end?

westernpromise

I think all these utopian pipedreams about droids and robots are simply unduly influenced by clich! from popular entertainment.

People just like imagining being able to make people. The ancient Greeks had Talos the giant robot of Crete, ancient Judaism had the golem, through Frankenstein, Maria out of Metropolis all the way up to the clich! evil androids of the Alien movies.

The actual prospects of humanoids doing drudge work - as opposed to improved automation generally - seems very unlikely to me.

Anything like that would also be impossibly costly for many people to own if it was actually capable of useful work. In ancient Rome, human slaves were astonishingly expensive. They were worth the net value of a lifetime's labour, less the cost of keeping them. You didn't buy a slave body servant for fourpence ha'penny. In money of today a Roman slave would cost you a couple of hundred thousand quid. A slave android would be likewise because why wouldn't it.