3 ms·

You’re saying that prices are bounded by construction costs. Sure, as with every other good. But there’s a long way to go between current property prices and

• jjav 4mo ago
  > But there’s a long way to go between current property prices and raw construction costs. How much? Searching a bit suggests that net profit margin in housing industry is about 8.7% Consindering an investor can get ~3.75% in zero risk T-bills without lifting a shovel, that's about an extra 5% net profit to get involved in building housing. Which isn't nothing, it's a decent profit. But I also wouldn't call extra 5% a huge difference.