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Housing prices are driven by the people paying the price (or rent) not by the people selling or renting (the Ricardian Theory of Rent). With the caveat that in

• franga2000 7y ago
  > Housing prices are driven by the people paying the price Not sure how that relates to the Ricardian theory, but while prices are technically "driven" by the people paying them, this does not seem like a useful observation to me. This isn't "if you keep buying every next more expensive iPhone, Apple will keep raising the price". You can't just not buy/rent property. It is a basic necessity. While prices vary between regions, that is still hardly a choice. Most places, jobs are scarce and transport is a disaster - you can't just go live somewhere else because your job is here (and most jobs are in high-rent areas). This means that no matter how high* prices get, people will have to find a way to pay (even if that means basically starving for the rest of their lives) and landlords are aware of this, so they keep raising the prices with the argument that "people clearly have the money, so it's fine". In theory, it makes sense for a finite resource to increase in price with increasing demand, but prices are increasing a lot faster than demand is and housing isn't as finite as land is (we can build up). This points to the supply side (landlords and developers) being the problem, not the people just trying to survive.