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Am I the only one seeing the intricate relationship between population growth and the housing market? When the population grows, the housing price increases, an

Am I the only one seeing the intricate relationship between population growth and the housing market? When the population grows, the housing price increases, and at some point it becomes too difficult for young couples to have extra rooms to raise kids (many still live with their parents). When the population decreases or collapses, the housing market crashes, and then, one or two generations later, the population increases again. The thing is that we've been accustomed to a quick and unprecedented population growth since the end of WW2, and the housing market of big cities are reaching its limits all over the world. My take is that it won't be a problem, au contraire, the population will stabilize around 10B, and this is a good thing on many dimensions. Think about it.

jejeyyy77 3y ago
People just move further out.
- stephc_int13 3y ago
  Yes, this is what they do, up to a point. Thanks to modern transportation (cars and good roads) and telecommunication (phones and internet) we've been able to expand our cities to levels that were unachievable during ancient times. But with current tech, there are still practical limits. The undeniable proof is the huge pressure on the housing market. If it was practical to simply build houses in the middle of nowhere, people would do that instead of fighting for small space in large cities.
naasking 3y ago
Population growth isn't the only variable, there's also housing regulations and zoning that influence how much gets constructed. For example, if property taxes increased quadratically based on property size, then there would be a very strong incentive against mega mansions and towards denser housing.
- stephc_int13 3y ago
  The housing market is complex and driven by many factors. But the main one, long-term, is population density. The regulations and zoning are side effects of the fact that the housing market is used as a stable investment, precisely because population growth as been so steady for many decades now. Ultimately, speculators and finance are acting as pricing agents, and they also skew the market to extract as much juice as possible from it. But in the end, the usefulness, and thus the value, of houses, is determined by the good old market rules, supply and demand, everything else is high-frequency noise, not the signal.
friend_and_foe 3y ago
This model assumes constant housing stock, or at least, housing stock that grows slower than population. But this is not a given, so we need to ask, why is housing stock growing slower than population? And no matter what the answer is, it tells us that the problem here is not population growth. More people means more hands that can build houses. Even if construction efficiency weren't gaining in terms of man hours, it would mean at least that housing could he built to keep up with population. There's no shortage of land, most land is uninhabited. So where's the bottleneck?

jejeyyy77 3y ago

People just move further out.

stephc_int13 3y ago
Yes, this is what they do, up to a point. Thanks to modern transportation (cars and good roads) and telecommunication (phones and internet) we've been able to expand our cities to levels that were unachievable during ancient times. But with current tech, there are still practical limits. The undeniable proof is the huge pressure on the housing market. If it was practical to simply build houses in the middle of nowhere, people would do that instead of fighting for small space in large cities.

naasking 3y ago

Population growth isn't the only variable, there's also housing regulations and zoning that influence how much gets constructed. For example, if property taxes increased quadratically based on property size, then there would be a very strong incentive against mega mansions and towards denser housing.

stephc_int13 3y ago
The housing market is complex and driven by many factors. But the main one, long-term, is population density. The regulations and zoning are side effects of the fact that the housing market is used as a stable investment, precisely because population growth as been so steady for many decades now. Ultimately, speculators and finance are acting as pricing agents, and they also skew the market to extract as much juice as possible from it. But in the end, the usefulness, and thus the value, of houses, is determined by the good old market rules, supply and demand, everything else is high-frequency noise, not the signal.

friend_and_foe 3y ago

This model assumes constant housing stock, or at least, housing stock that grows slower than population. But this is not a given, so we need to ask, why is housing stock growing slower than population? And no matter what the answer is, it tells us that the problem here is not population growth. More people means more hands that can build houses. Even if construction efficiency weren't gaining in terms of man hours, it would mean at least that housing could he built to keep up with population. There's no shortage of land, most land is uninhabited. So where's the bottleneck?