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I'm having trouble reconciling this with the fact that in my corner of the world prices have been growing exponentially during the past decade despite the popul
by Tade0 3y ago
I'm having trouble reconciling this with the fact that in my corner of the world prices have been growing exponentially during the past decade despite the population remaining relatively stable and a record number of housing units being built.
The only thing that changed in this period was investment demand, which skyrocketed.
I have a building in my neighbourhood which consists solely of tiny studio apartments - the vast majority of which were already bought out back when the project was still a hole in the ground. Half of the lights are perpetually dark, because barely anyone lives there.
Or better yet: there's a hole in the ground in my neighbourhood that was still the previous building back when they started selling apartments - the company went bankrupt during the pandemic and construction was only started when another company stepped in and bought everything.
Bottom line is you can't fight exponential growth in demand with linear increase of supply.
- sokoloff 3y ago> in my corner of the world prices have been growing exponentially during the past decade Even steady inflation results in an exponential growth in prices.
- Tade0 3y agoTo the tune of 8-10% annually in a borderline deflationary economic environment - which was the case for most of the last decade? I don't think this increase can be attributed to inflation.
- 01100011 3y agoThis. We're still in the midst of an asset bubble due to fiscal and monetary excess. Monetary policy changes haven't largely taken effect yet while we are still stimulating the economy on the fiscal side with deficit spending.
- akavi 3y agoWhat's your corner of the world? I'm sure we can find hard data on the population growth vs. new building rates which might be illuminatory.
- Tade0 3y agoPoland. Population data: https://data.worldbank.org/indicator/SP.POP.TOTL?locations=PL https://data.worldbank.org/indicator/SP.POP.TOTL?locations=P... Number of new apartments handed over every year: https://demagog.org.pl/wp-content/uploads/2022/06/Mieszkania-oddane-do-uzytku.png https://demagog.org.pl/wp-content/uploads/2022/06/Mieszkania... Price changes vs reference moment(dark blue - new apartments, light blue - used): https://v.wpimg.pl/QUJDREVGfjQrJiR2eTxzIWh-cCw_ZX13P2ZoZ3lxY2EyazQsOiIjMDorfCIkMiE0PTR8NTpoMCUjayR0eSM4JjooMzx5Ijw3LyB9cWchY2EpJWdoNHRiY2dwNCFhajNnKSV_Jm4mYmx5dWpybiFhdzc https://v.wpimg.pl/QUJDREVGfjQrJiR2eTxzIWh-cCw_ZX13P2ZoZ3lxY... It took a war in a neighbouring country for this madness to pause for a moment, but prices are already picking up again.