5 ms·

I think noone knows, really. In 2008 it was a single cause driving the prices up and then sharply down. This time around it seems to be an equation with a few u

by aenis 4y ago

I think noone knows, really. In 2008 it was a single cause driving the prices up and then sharply down. This time around it seems to be an equation with a few unknowns: when will the war end - and how. When will china end their zero covid policy (or how will it end). What will the policymakers do if supply-driven inflation eases? Very hard to predict. Just closed on a house in the Netherlands. I expect the prices to stagnate but not fall like they did in 2008. There is a limited supply, the demand is strong even at todays prices.

piva00 4y ago
Looking at the housing market from Sweden I feel your conclusion on stagnation will hold true until the floodgates of new construction supported by policy open, that won't happen soon... I can only envision a real fall in prices when I look at projects such as the miljonprogram from the 60-70s here in Sweden, mass building of shelters, left to its own devices the private sector will only try to game regulations to extract as much as possible from the land they own. A very visible gaming device is to constrain supply to always sell new units on or above current market prices even if you could potentially build faster, there is no incentive to sell cheaper.
- aenis 4y ago
  Yup. And for small, dense countries like the Netherlands there are also physical constraints. The Dutch try to protect their landscapes, and new development happens in areas that dont encroach on the farmland. And also, the building code makes new developments relatively expensive, often significantly more so than existing buildings. There are also political and cultural issues at stake. The Dutch are a nation of proud homeowners, and the passing of accumulated wealth from one generation to the next allowed for the prices to keep growing.

5 ms·

I think noone knows, really. In 2008 it was a single cause driving the prices up and then sharply down. This time around it seems to be an equation with a few u

by aenis 4y ago

piva00 4y ago
Looking at the housing market from Sweden I feel your conclusion on stagnation will hold true until the floodgates of new construction supported by policy open, that won't happen soon... I can only envision a real fall in prices when I look at projects such as the miljonprogram from the 60-70s here in Sweden, mass building of shelters, left to its own devices the private sector will only try to game regulations to extract as much as possible from the land they own. A very visible gaming device is to constrain supply to always sell new units on or above current market prices even if you could potentially build faster, there is no incentive to sell cheaper.
- aenis 4y ago
  Yup. And for small, dense countries like the Netherlands there are also physical constraints. The Dutch try to protect their landscapes, and new development happens in areas that dont encroach on the farmland. And also, the building code makes new developments relatively expensive, often significantly more so than existing buildings. There are also political and cultural issues at stake. The Dutch are a nation of proud homeowners, and the passing of accumulated wealth from one generation to the next allowed for the prices to keep growing.