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Blaming cheap money is wrong and upside down basic macro. Lowering property prices by raising interest rates, makes it more difficult to afford houses and impl

Blaming cheap money is wrong and upside down basic macro. Lowering property prices by raising interest rates, makes it more difficult to afford houses and implies killing the economy and putting people out of work. Home prices usually end up going down only because people are made not to be able to afford them. This is incredibly destructive and it only allows more people to live in the same area when they are forced to move in with their parents. I used to think rising house prices were a bad situation for us millennials but now I believe this to be a best case scenario. It is impossible to keep adding people to the same space while giving everybody much room for their money. The problem is trying to cram a generation of millennials into the same area as a wealthy cohort of boomers and rich immigrants predictably makes home prices go up. Increasing supply or nudging the new generation to go in areas with more potential for spacial growth not only allows the new community to be built to the image of its own people but building and growing the infrastructure of a new neighborhood or revitalizing a dying town creates jobs for the people that go there. The best thing governments could do to help with this situation would be to encourage some of the institutions and jobs relevant to new generations to move out of overpriced, overcrowded centers. They could foster jobs creation in centers with more low cost space and less chance of spacial overload. They could maybe move some public jobs there to help jump start the migration. This would also put some downward pressure on the prices in overcrowded places until we reach some kind of equilibrium. I say stop trying to cram everyone in the same volume. Let the older rich generation keep the expensive quarters they've spent their life building and allow new generations to create our own communities, in our own space, from choices guided guided our own tastes.

tostitos1979 11y ago
I don't think you are correct. Lets take Toronto as an example. This city built condo projects by the dozens. The GTA (greater toronto area) is so sprawled out, I recall a statistic that it was 1/4 the size of England. The transportation infrastructure cannot take it ... major roads like the DVP and 401 are always clogged. Farmland in some of the far away areas is being converted to houses. The problem here is the price of land is so highly inflated, you now have no choice but to pay a million buckeros for a modest detached house. Condos in areas near the subway and restaurants are also priced stupid ... one of the areas we considered was priced at $680 a square foot (in an area called North York). The problem is cheap, free money. People who got in on it early own 2-3 condos.
- Htsthbjig 11y ago
  Agreed. I lived in Canada like 5 months or so with some friends. The country is so big that we used private airplanes to move around, which was very normal there. The prices on Toronto smells Bubble so much that feels dangerous to be near that when it does pop.
  - frabbit 11y ago
    Careful now... your privilege is showing.
  - BenoitEssiambre 11y ago
    >The prices on Toronto smells Bubble so much that feels dangerous to be near that when it does pop. There may be a bubble, but you could also argue from basic supply and demand that until prices cause people to stay away from there and build new communities in less dense regions, they are still not high enough.
- BenoitEssiambre 11y ago
  >The transportation infrastructure cannot take it ... major roads like the DVP and 401 are always clogged. > Condos in areas near the subway and restaurants are also priced stupid ... Doesn't that prove my point?
doc_holliday 11y ago
But what you are saying would imply that property prices in lower demand areas went down as property prices in higher demand areas went up. That didn't happen. Instead even lower demand areas everywhere in the UK have gone up in real money terms and relative to local earnings. No where has fallen significantly, everywhere now your money doesn't go as far as it did. That is what loose money policy does. Just places like London have had astronomical increases.
- BenoitEssiambre 11y ago
  >But what you are saying would imply that property prices in lower demand areas went down. No only that they didn't go up as much. As wages and population increases, it is quite normal that house prices generally go up at least a little.
  - doc_holliday 11y ago
    "As wages and population increases" But that is not true for parts of the UK. Wages in general in the UK in real terms have gone nowhere or down, yet pretty much everywhere in real terms property value has gone up.
bb88 11y ago
It should be economically efficient for people to live in big cities. Smaller living spaces are more economical than larger ones. Public transportation can be used instead of building larger roadways. The cost to live there may be more expensive, but the taxes go further, and taxes should be lower. Lower taxes and higher density means more companies will come into the city to hire, etc. That's not true right now for a number of reasons, but that's why large cities exist. If rent is too high, it just means that there's not enough supply. And the city should fix that.

tostitos1979 11y ago

I don't think you are correct. Lets take Toronto as an example. This city built condo projects by the dozens. The GTA (greater toronto area) is so sprawled out, I recall a statistic that it was 1/4 the size of England. The transportation infrastructure cannot take it ... major roads like the DVP and 401 are always clogged. Farmland in some of the far away areas is being converted to houses. The problem here is the price of land is so highly inflated, you now have no choice but to pay a million buckeros for a modest detached house. Condos in areas near the subway and restaurants are also priced stupid ... one of the areas we considered was priced at $680 a square foot (in an area called North York). The problem is cheap, free money. People who got in on it early own 2-3 condos.

Htsthbjig 11y ago
Agreed. I lived in Canada like 5 months or so with some friends. The country is so big that we used private airplanes to move around, which was very normal there. The prices on Toronto smells Bubble so much that feels dangerous to be near that when it does pop.
- frabbit 11y ago
  Careful now... your privilege is showing.
- BenoitEssiambre 11y ago
  >The prices on Toronto smells Bubble so much that feels dangerous to be near that when it does pop. There may be a bubble, but you could also argue from basic supply and demand that until prices cause people to stay away from there and build new communities in less dense regions, they are still not high enough.
BenoitEssiambre 11y ago
>The transportation infrastructure cannot take it ... major roads like the DVP and 401 are always clogged. > Condos in areas near the subway and restaurants are also priced stupid ... Doesn't that prove my point?

doc_holliday 11y ago

But what you are saying would imply that property prices in lower demand areas went down as property prices in higher demand areas went up. That didn't happen. Instead even lower demand areas everywhere in the UK have gone up in real money terms and relative to local earnings. No where has fallen significantly, everywhere now your money doesn't go as far as it did. That is what loose money policy does. Just places like London have had astronomical increases.

BenoitEssiambre 11y ago
>But what you are saying would imply that property prices in lower demand areas went down. No only that they didn't go up as much. As wages and population increases, it is quite normal that house prices generally go up at least a little.
- doc_holliday 11y ago
  "As wages and population increases" But that is not true for parts of the UK. Wages in general in the UK in real terms have gone nowhere or down, yet pretty much everywhere in real terms property value has gone up.

bb88 11y ago

It should be economically efficient for people to live in big cities. Smaller living spaces are more economical than larger ones. Public transportation can be used instead of building larger roadways. The cost to live there may be more expensive, but the taxes go further, and taxes should be lower. Lower taxes and higher density means more companies will come into the city to hire, etc. That's not true right now for a number of reasons, but that's why large cities exist. If rent is too high, it just means that there's not enough supply. And the city should fix that.