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If demand correlates only with population, and supply is constant, all those who own housing will see their value go up as long as the population increases. If
by hayst4ck 4y ago
If demand correlates only with population, and supply is constant, all those who own housing will see their value go up as long as the population increases.
If housing is an investment it means either demand went up (population growth), or supply did not go up (housing wasn't built).
I suspect that if you measure housing price adjusted for inflation per capita, you would get a measure of housing supply.
The fact that house owning individuals financially gain from limiting housing supply is, to me, the defining feature of class warfare, even if people don't think they are participating in it.
I think this is the basis for the statement "housing can either be affordable or an investment, but not both." Housing can either be in adequate supply (affordable) or limited (an investment).
- sidewndr46 4y agoYou're correct, but missing a part of the picture. The cost of adding supply (to meet demand) goes up each year due to the perpetual increase in the building codes which must be conformed to.
- hayst4ck 4y agoSo if we assume you are correct, if we looked at an adjusted cost of housing graph (adjusted for inflation/population), its slope would change primarily when building code regulation goes into effect?
- sidewndr46 4y agoYeah that's pretty accurate. Lots of little inflection points every few years as new things are added.
- zajio1am 4y agoHousing can be investment even if it is in adequate supply and does not raise in value (above inflation), just from rents / saving from not-paying rent.