I take it we agree on the basic validity of the laws of supply and demand. My first question: where, if not supply constraints, are these high prices are coming from?
UK house prices are nearly 10x earnings:
Rents in London are amongst the highest in Europe: https://twitter.com/jwhandley17/status/1779782460944900196
But if these aren’t supply problems, what explains them?
Housing is a good source of long-term income, there are comparatively poor options, so prices go up compared to incomes.
To quote @Ege Erdil attempting to steelman:
there could be an interest rate effect—as interest rates fall, claims on future rents become more expensive so housing prices go up.
Counter point: We would likely guess that the graph of rent to income would look similar.
I take it we agree on the basic validity of the laws of supply and demand. My first question: where, if not supply constraints, are these high prices are coming from?
UK house prices are nearly 10x earnings:
Rents in London are amongst the highest in Europe: https://twitter.com/jwhandley17/status/1779782460944900196
But if these aren’t supply problems, what explains them?
Housing is a good source of long-term income, there are comparatively poor options, so prices go up compared to incomes.
To quote @Ege Erdil attempting to steelman:
Counter point: We would likely guess that the graph of rent to income would look similar.