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Fits with my experience. Its mainly the bank's willingness to loan money that drives house sales. Home buyers are some of the best protected groups, so its no w
by tokai 2y ago
Fits with my experience. Its mainly the bank's willingness to loan money that drives house sales. Home buyers are some of the best protected groups, so its no wonder that its a speculative market driven mainly by available funds and not supply and demand.
- lazide 2y agoOr perhaps another way of stating it - available funds largely determine demand.
- plantain 2y agoI don't see how this holds. Why would more houses not get built if the banks were so willing to lend higher and higher amounts? Seems more to me like, because there is a shortage, the marginal price gets bid up to the maximum people can possibly pay (which is decided by the banks).
- HPsquared 2y agoAnd keeping in mind dollars are a limitless, renewable resource.
- electriclove 2y agoSame here. I hope we get some good comments from those who believe it is all about creating more affordable housing. I’m interested in reading their counter argument or reading if this changes their thinking.
- hylaride 2y ago(Availability of and access to) Debt is definitely a driving factor. It grants access to a larger group of people and if supply can't keep up (for a variety of reasons), it'd drive it up prices in the short to medium term. In the postwar era, any time you saw a country ease mortgage lending rules, home prices would inevitably rise, which would inevitably be made worse by further lessening of standards to "expand affordability". This was the TL;DR of Canadian housing prices (compounded by high immigration, lack of trades people, and high resource costs due to at the time demand from China).
- epistasis 2y agoWhy would anybody pay any more with that extra money from the bank, unless there's a supply shortage? There is no leverage for sellers to demand excess new money unless there's a shortage.