Actually the opposite, according to economics free market regulates demand/supply so the more there’s demand the most there’s supply(and cheaper prices). I’m not sure what’s the problem in this case, but sounds more like there’s too much regulations on building housing, maybe? (More houses = Bigger supply = Cheaper)
Edit: Or you can cut immigration, and thus reduce demand, but it sounds like a bad option obviously.
Okay, can you point my mistake please? I would be happy to know how it does work then.
Supply and demand, in economics, relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market. The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium the quantity of a good supplied by producers equals the quantity demanded by consumers.
Other things being equal, an increase in demand leads to an increase in the equilibrium price. Google “demand shock” for more relevant info. To the extent that it is governed by the usual laws of supply and demand (which is to a notably limited extent), housing is a market that is slow to adapt and will take quite some time to adjust to a sudden change in the demand curve.
Yep, I know about demand shock.
And I know that housing is slow to adapt usually, however it all adapt, even if it will take time. (That’s what happened with housing bubbles for example)
And I agree with you, you’re correct, however how does it go against additionally? Even if I’ve simplified, haven’t I made the same point?
The part that struck me as nonsensical was “the more there’s demand the most there’s supply(and cheaper prices).” It remains unclear what you meant to say, but perhaps you were thinking of some kind of economy of scale effect, where a larger market leads to more efficient production? That seems largely inapplicable here, though.
Anyway, that there’s “too much regulations” is one overly simplistic answer given by certain politicians around here, just as “too much immigration” is the overly simplistic cause often given for our housing market problems. There’s at least a little bit of truth in each if you look hard enough, but really it’s a pretty complicated situation with no easy answers that requires more sophisticated analysis than seems possible to bring anywhere near visibility in contemporary sound-bite- and clickbait-based politics.
Despite that, given all the various longstanding and intractable ways in which our systems of housing, housing investment, and urban development are currently fucked up, rapid population growth certainly does make that problem worse too. It may not be the root cause of the problem, but it’s another push in the wrong direction for a situation that’s been bad for as long as most of us can remember.
Capitalists hate affordable housing so much…
Actually the opposite, according to economics free market regulates demand/supply so the more there’s demand the most there’s supply(and cheaper prices). I’m not sure what’s the problem in this case, but sounds more like there’s too much regulations on building housing, maybe? (More houses = Bigger supply = Cheaper)
Edit: Or you can cut immigration, and thus reduce demand, but it sounds like a bad option obviously.
That is not how supply and demand work, even in theory.
Okay, can you point my mistake please? I would be happy to know how it does work then.
Other things being equal, an increase in demand leads to an increase in the equilibrium price. Google “demand shock” for more relevant info. To the extent that it is governed by the usual laws of supply and demand (which is to a notably limited extent), housing is a market that is slow to adapt and will take quite some time to adjust to a sudden change in the demand curve.
Yep, I know about demand shock. And I know that housing is slow to adapt usually, however it all adapt, even if it will take time. (That’s what happened with housing bubbles for example)
And I agree with you, you’re correct, however how does it go against additionally? Even if I’ve simplified, haven’t I made the same point?
The part that struck me as nonsensical was “the more there’s demand the most there’s supply(and cheaper prices).” It remains unclear what you meant to say, but perhaps you were thinking of some kind of economy of scale effect, where a larger market leads to more efficient production? That seems largely inapplicable here, though.
Anyway, that there’s “too much regulations” is one overly simplistic answer given by certain politicians around here, just as “too much immigration” is the overly simplistic cause often given for our housing market problems. There’s at least a little bit of truth in each if you look hard enough, but really it’s a pretty complicated situation with no easy answers that requires more sophisticated analysis than seems possible to bring anywhere near visibility in contemporary sound-bite- and clickbait-based politics.
Despite that, given all the various longstanding and intractable ways in which our systems of housing, housing investment, and urban development are currently fucked up, rapid population growth certainly does make that problem worse too. It may not be the root cause of the problem, but it’s another push in the wrong direction for a situation that’s been bad for as long as most of us can remember.