Venger Posted June 15, 2016 Share Posted June 15, 2016 To follow on from my point about housing demand vs house prices. Spevuvested VI market. HPC it, then see demand. And if there is still demand that requires more houses built, land prices will be lower. Bring more Indy developers back and more self-building. I know of someone who outbid someone else (my side) for a long plot some 16 years ago, and has not built on it. Content it's just gaining value from HPI (shortage of homes). Specuvestor. HPC. A million quid and you have to scrap over a parking space! Of course there is demand for housing in prime areas. It's because interest rates are so low. The demand would evaporate if interest rates were raised. And if that demand was genuinely based on need, we'd have seen rents rise in line with house prices. They haven't. They are certainly high, but not in proportion to house prices. Ergo, the demand is based on speculation, not on need, and speculation is fuelled by cheap money. So the demand for housing argument fails. And when the cheap money dries up...This is the economics of the mad house. Are we back to the "debt is good when it's investment" and "debt is bad when it's consumption" line peddled by the snake-oil salesman? What happens to the notion of "affordable debt" when it's backed by an asset whose price is rigged by a Ponzi scam and money printing? Truly the lunatics have taken over the asylum. Quote Link to comment Share on other sites More sharing options...
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