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I can’t follow these kinds of comparisons, because housing isn’t a function of wages. The only thing that affects housing prices is the supply of houses. Does

I can’t follow these kinds of comparisons, because housing isn’t a function of wages. The only thing that affects housing prices is the supply of houses. Does the UK have a large supply of houses? Does London have a lot of spare land where they can build new houses? Is the population of the UK increasing or decreasing? These are the only question you need to ask to predict what will happen to real estate values.

88913527 3y ago
Financing seems to have a large impact on prices, as does zoning, and supply. But the ability to borrow money and use leverage is paramount.
scotty79 3y ago
> The only thing that affects housing prices is the supply of houses. And supply of capital in search of investment vessel. Wage workers are just taken along for the ride. Most properties in UK are bought and traded for investment purposes. Home ownership of UK is one of the lowest in EU.
- ffhhttt 3y ago
  > Home ownership of UK is one of the lowest in EU. Not really. Its about on par with France and significantly above Germany.
  - MattPalmer1086 3y ago
    Probably true now, although it used to be higher. Renters in the UK have almost no rights.
vinyl7 3y ago
A house can be priced as high as it wants...if no one can afford the mortgage then I guess its just going to sit there with a For Sale sign for decades?
- MattPalmer1086 3y ago
  In practice that's kind of what happens, barring an economic shock that forces people to sell. House prices are very sticky on the way down. People simply don't sell rather than take a loss, unless they are forced to.
ak_111 3y ago
I suggest you do a bit of research on how income relates to house prices. Here is the tldr: in country where most people buy houses on mortgages, and mortgages are given based on a person’s income then wages will pay a direct and very important role on house affordibity. Also house supply is important but far from the only factor effecting house prices. If gov builds 1000 new houses and they instantly get bought by, say, the Saudi sovereign wealth fund it will have virtually no impact on house prices.
- stevenhuang 3y ago
  If 1000 new houses get built and get bought instantly it won't have an impact on house prices? I beg your pardon? That's 1000 lots of land out of circulation. In no uncertain terms, this will have an affect on local market prices, by making the remaining land more valuable.
  - slyall 3y ago
    It depends what is happening to the houses. If they are empty then prices will remain the same or increase. If they are being rented out then prices to buy should decrease since there will be less demand (since more peopel will be renting and rents will probably decrease).
dugite-code 3y ago
> The only thing that affects housing prices is the supply of houses. Well yes and no. I would argue, treating housing as an investment vehicle for both corporate and foreign interests has had the biggest influence on low end housing prices around the world. Corporate buy-ups, government backed loans and "affordability" scemes have all actually pushed pricing higher. To be clear A large percentage of corporate and foreign ownership isn't actually needed to have a large influence on pricing simply because of where they are most likely to invest. Just a couple of percent adds significant upwards pressure on the low end of the market where affordability is felt the most keenly. After all buy low sell high.
- citrin_ru 3y ago
  Real estate is a lucrative investment only because demand outpacing supply and prices expected to grow indefinitely. If supply will substantially increase it would depress prices and investors will move to jurisdictions where government helps them by restricting supply.
tonyedgecombe 3y ago
>The only thing that affects housing prices is the supply of houses. Interest rates have a massive impact on how much people have available to spend.

88913527 3y ago

Financing seems to have a large impact on prices, as does zoning, and supply. But the ability to borrow money and use leverage is paramount.

scotty79 3y ago

> The only thing that affects housing prices is the supply of houses. And supply of capital in search of investment vessel. Wage workers are just taken along for the ride. Most properties in UK are bought and traded for investment purposes. Home ownership of UK is one of the lowest in EU.

ffhhttt 3y ago
> Home ownership of UK is one of the lowest in EU. Not really. Its about on par with France and significantly above Germany.
- MattPalmer1086 3y ago
  Probably true now, although it used to be higher. Renters in the UK have almost no rights.

vinyl7 3y ago

A house can be priced as high as it wants...if no one can afford the mortgage then I guess its just going to sit there with a For Sale sign for decades?

MattPalmer1086 3y ago
In practice that's kind of what happens, barring an economic shock that forces people to sell. House prices are very sticky on the way down. People simply don't sell rather than take a loss, unless they are forced to.

ak_111 3y ago

I suggest you do a bit of research on how income relates to house prices. Here is the tldr: in country where most people buy houses on mortgages, and mortgages are given based on a person’s income then wages will pay a direct and very important role on house affordibity. Also house supply is important but far from the only factor effecting house prices. If gov builds 1000 new houses and they instantly get bought by, say, the Saudi sovereign wealth fund it will have virtually no impact on house prices.

stevenhuang 3y ago
If 1000 new houses get built and get bought instantly it won't have an impact on house prices? I beg your pardon? That's 1000 lots of land out of circulation. In no uncertain terms, this will have an affect on local market prices, by making the remaining land more valuable.
- slyall 3y ago
  It depends what is happening to the houses. If they are empty then prices will remain the same or increase. If they are being rented out then prices to buy should decrease since there will be less demand (since more peopel will be renting and rents will probably decrease).

dugite-code 3y ago

> The only thing that affects housing prices is the supply of houses. Well yes and no. I would argue, treating housing as an investment vehicle for both corporate and foreign interests has had the biggest influence on low end housing prices around the world. Corporate buy-ups, government backed loans and "affordability" scemes have all actually pushed pricing higher. To be clear A large percentage of corporate and foreign ownership isn't actually needed to have a large influence on pricing simply because of where they are most likely to invest. Just a couple of percent adds significant upwards pressure on the low end of the market where affordability is felt the most keenly. After all buy low sell high.

citrin_ru 3y ago
Real estate is a lucrative investment only because demand outpacing supply and prices expected to grow indefinitely. If supply will substantially increase it would depress prices and investors will move to jurisdictions where government helps them by restricting supply.

tonyedgecombe 3y ago

>The only thing that affects housing prices is the supply of houses. Interest rates have a massive impact on how much people have available to spend.