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The demand is still there, it's just restricted. Someone living in the back of a van in a gym carpark on an industrial estate is typically doing that because th

by ta1243 1y ago

The demand is still there, it's just restricted. Someone living in the back of a van in a gym carpark on an industrial estate is typically doing that because the cost of a 1 bed flat is too high. Lowering prices allows that demand to be seen. In the UK 8.5 million people in England are facing some form of unmet housing need. That's more than 10% of the population. https://www.housing.org.uk/globalassets/files/people-in-housing-need/people-in-housing-need-2021.pdf https://www.housing.org.uk/globalassets/files/people-in-hous... > More than 1.9 million households are hosting a ‘concealed’ household – for example, adult children still living with their parents. Even when it costs nothing, there's always a limit to demand. Just look at say a hotel breakfast. I could have 50 sausages, 20 cups of coffee, etc. I don't, despite it being costless.

9rx 1y ago
> The demand is still there It's not, though. That's the whole political contention. That demand is, because of high prices, not at the levels the population want to see. Demand is defined as having desire and willingness to pay for a good or service. High prices maintains the desire in most cases, but chases off the willingness. That's the whole point of having prices! > Even when it costs nothing, there's always a limit to demand. Now you're describing a (technical) shortage: A situation where an external mechanism prevents price from rising. In a functioning market, buyers will pay more to stave off demand. But if price is forced to remain lower than people have the willingness to pay (free, in your example) then there is no control mechanism to see people back away from demand. But that's not a problem in the housing market. If you have the desire and willingness to buy a home, you will have absolutely no trouble finding a home to buy. Price is doing its job. The problem is for those who only have desire. They are not part of the demand, but that doesn't mean they don't want their desires filled. Hence the political push to see an increase in demand. i.e. Enabling those with only desire to also find willingness by finding a way to lower prices (which means addressing supply).
- ta1243 1y ago
  "Unmet demand refers to the gap between the demand for a product or service and the actual supply available in the market. " Now sure, if you offer $50m for a 1 bed house someone will sell you one, at the expense of the person only offering $40m. That doesn't mean there is no unmet demand.
  - 9rx 1y ago
    > That doesn't mean there is no unmet demand. Right, it doesn't tell us much of anything, but there does need to be some external mechanism that is getting in the way from transaction completion in order for demand to be unmet. A shortage is one example of such a mechanism, but there clearly isn't a shortage[1] in the housing market. Prices have risen just fine. There is probably some unmet demand in the fact that builders simply can't build fast enough — where people have the money in hand to buy and have a seller theoretically willing to sell, but can't do so because the place is not yet finished — however, there isn't a lot of evidence to suggest that is a big problem and it is definitely not the problem being discussed. "I really want to buy a house but I cannot afford it" is not unmet demand. That is what we call dreaming. As before, demand is comprised of desire _and willingness_. [1] Speaking in terms of a "shortage" in the technical sense. I recognize that, colloquially, it has become popular to use "shortage" to mean "The price is higher than I like", but that definition, while certainly appealing to emotion, is nonsensical when you really think about it. Literally everything is in "shortage" by that definition, making it a useless term (as useless as demand = everyone who wishes to have something). The technical definitions are actually useful, though.
    - ta1243 1y ago
      There clearly is a shortage. When 98% of available homes are used that is a shortage. I just did a rightmove search for rental in London and checked the first 8 adverts, every single one was added today except for one which isn't available until september. Your definition of shortage seems very different to mine so there's no point in continuing.
      - 9rx 1y ago
        > When 98% of available homes are used that is a shortage. I anticipate that 98% of available jets are used. And I certainly can't afford one. Does that mean there is a shortage of jets? What isn't there a shortage of? > Your definition of shortage seems very different to mine so there's no point in continuing. What, then, was the point of continuing earlier? We have been discussing the technical definition since the onset. I respect your freedom to make up definitions on the spot as you see fit, but there is nothing that can be discussed about such definitions. Clearly you saw value in discussing what surrounds the technical definition earlier, as demonstrated by multiple replies. Why the change of tune now?

by ta1243 1y ago

9rx 1y ago

> The demand is still there It's not, though. That's the whole political contention. That demand is, because of high prices, not at the levels the population want to see. Demand is defined as having desire and willingness to pay for a good or service. High prices maintains the desire in most cases, but chases off the willingness. That's the whole point of having prices! > Even when it costs nothing, there's always a limit to demand. Now you're describing a (technical) shortage: A situation where an external mechanism prevents price from rising. In a functioning market, buyers will pay more to stave off demand. But if price is forced to remain lower than people have the willingness to pay (free, in your example) then there is no control mechanism to see people back away from demand. But that's not a problem in the housing market. If you have the desire and willingness to buy a home, you will have absolutely no trouble finding a home to buy. Price is doing its job. The problem is for those who only have desire. They are not part of the demand, but that doesn't mean they don't want their desires filled. Hence the political push to see an increase in demand. i.e. Enabling those with only desire to also find willingness by finding a way to lower prices (which means addressing supply).

ta1243 1y ago
"Unmet demand refers to the gap between the demand for a product or service and the actual supply available in the market. " Now sure, if you offer $50m for a 1 bed house someone will sell you one, at the expense of the person only offering $40m. That doesn't mean there is no unmet demand.
- 9rx 1y ago
  > That doesn't mean there is no unmet demand. Right, it doesn't tell us much of anything, but there does need to be some external mechanism that is getting in the way from transaction completion in order for demand to be unmet. A shortage is one example of such a mechanism, but there clearly isn't a shortage[1] in the housing market. Prices have risen just fine. There is probably some unmet demand in the fact that builders simply can't build fast enough — where people have the money in hand to buy and have a seller theoretically willing to sell, but can't do so because the place is not yet finished — however, there isn't a lot of evidence to suggest that is a big problem and it is definitely not the problem being discussed. "I really want to buy a house but I cannot afford it" is not unmet demand. That is what we call dreaming. As before, demand is comprised of desire _and willingness_. [1] Speaking in terms of a "shortage" in the technical sense. I recognize that, colloquially, it has become popular to use "shortage" to mean "The price is higher than I like", but that definition, while certainly appealing to emotion, is nonsensical when you really think about it. Literally everything is in "shortage" by that definition, making it a useless term (as useless as demand = everyone who wishes to have something). The technical definitions are actually useful, though.
  - ta1243 1y ago
    There clearly is a shortage. When 98% of available homes are used that is a shortage. I just did a rightmove search for rental in London and checked the first 8 adverts, every single one was added today except for one which isn't available until september. Your definition of shortage seems very different to mine so there's no point in continuing.
    - 9rx 1y ago
      > When 98% of available homes are used that is a shortage. I anticipate that 98% of available jets are used. And I certainly can't afford one. Does that mean there is a shortage of jets? What isn't there a shortage of? > Your definition of shortage seems very different to mine so there's no point in continuing. What, then, was the point of continuing earlier? We have been discussing the technical definition since the onset. I respect your freedom to make up definitions on the spot as you see fit, but there is nothing that can be discussed about such definitions. Clearly you saw value in discussing what surrounds the technical definition earlier, as demonstrated by multiple replies. Why the change of tune now?