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No do not confuse land prices with rents. Rents are set by wages. Land prices are set by loose credit.
by branchless 9y ago
No do not confuse land prices with rents. Rents are set by wages. Land prices are set by loose credit.
- conanbatt 9y agoI like how succinct this comment is. Is there a conclusion on the global movement of rent prices in comparison to house prices?
- paganel 9y ago> Rents are set by wages. That is incorrect. Loose credit most definitely affects rents, as in more people can now afford to buy real-estate (houses, apartments), that reduces the supply of available places to rent (assuming no new constructions take place, for the sake of the demonstration), and generally speaking a reduced level of supply has been accompanied by higher prices, in this case higher rents.
- jpatokal 9y agoYes, the supply of rental is affected, but the previous poster's point was that demand is anchored by reality (wages) and not speculation (bank loans).