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I assume in your analogy the general population is still buying the same amount of grain, so losing a silo of grain to rot is a pure loss to the farmer, and in
by clucas 4y ago
I assume in your analogy the general population is still buying the same amount of grain, so losing a silo of grain to rot is a pure loss to the farmer, and in a way is a loss to grain buyers (prices have to go up slightly).
But in the office space scenario, less office space is being used overall. This means that yes, landlords are losing the value of their investment, but (former) tenants are gaining access to cash flow that would have been tied up in rent and maintenance. So value has not been destroyed in the same way it was in the silo example.
I don't know if this is a good or bad thing, just pointing out a material difference in the two things you're trying to analogize.
- pixl97 4y ago>Housing can’t both be a good investment and be affordable People see the extremely high valuations of some things like housing and business locations as a good thing. Instead I mostly see them as asset inflation, and the decrease in their values as a good thing for the actual products produced by an economy.