4 ms·
If enough housing was being built, then the expected return on houses would be negative and investors wouldn't be buying them.
by polski-g 3y ago
If enough housing was being built, then the expected return on houses would be negative and investors wouldn't be buying them.
- wubrr 3y agoYou're ignoring the fact that most of the new supply being purchased by investors means they have more power to increase rents, re-leverage their existing real-estate and buy up more. Continuously increasing real-estate prices and rents until the bubble bursts. If everything worked based on the most basic econ101 principles, we wouldn't have any bubbles in the first place.