tag:blogger.com,1999:blog-1141932539860553199.post6806286536923171487..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: "Building new properties doesn't drive down house prices"Mark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger28125tag:blogger.com,1999:blog-1141932539860553199.post-65193146703749309952015-06-09T17:22:37.519+01:002015-06-09T17:22:37.519+01:00@R You seriously think that Keiser is parroting Ru...@R You seriously think that Keiser is parroting Russian propaganda?<br />No wonder I don't frequent this gaff so often any more!DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-19476738554070455082015-06-09T02:13:51.853+01:002015-06-09T02:13:51.853+01:00http://www.ons.gov.uk/ons/rel/regional-trends/regi...http://www.ons.gov.uk/ons/rel/regional-trends/regional-economic-indicators/march-2013/sum-london.html<br />Well done Londeners ;)<br />"Watch Keiser"<br />On RT? The Russian propaganda channel?Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-14711462419585909202015-06-08T19:59:06.382+01:002015-06-08T19:59:06.382+01:00"It is nonsense to believe that the housing m..."It is nonsense to believe that the housing market does not follow the same rules of supply and demand like other markets"<br /><br />So all markets are the same, are they? How about water? Obviously, if there is a shortage of water, its price will increase, but increasing supply rapidly gets you to the point where everyone has enough water, thank you very much, and increasing the supply is not going to do anything to the price. If the market for water is different, so can the market for land. Each plot of land gains its value from its location. The location of each plot of land is unique. OK there are other locations which are pretty similar, e.g. there are plenty of places where the commuting time to central London is an hour, but there are none that are exactly the same. <br />In this sense the LSE findings are surprising, because the only place where supply and demand applies to the housing (land) market is right next door to where the supply is. However, you have to compare like for like. The market for three-bed semis is not the same as for four-bed detached. The market for new houses is not the same as the market for old ones. In that sense there isn't one housing market, there are many and it is not surprising that the price of an Elizabethan thatched 3-bed cottage is not reduced by the building of 20 four bed detatched houses with garage at the other end the same village.<br /><br />LF, you are aware that there was a financial crash in 2008, because you mention it in one of your comments. Is it not possible that it was this financial crash that caused house prices in Ireland and Spain to drop, not the fact that there was a surplus of housing? If you care to look, you will find that, despite the severe oversupply, house prices didn't drop in either country until the crash, which is why the developers kept building. Also how do you explain England in the '60s and '70s, when a building boom was followed by a boom in prices, not preceded by one.<br /><br />Also, please can you explain why, if increasing supply reduces house prices, why prices are rising in Spain again, booming in fact, despite the fact that all the ghost towns remain empty?Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-43273770930413583112015-06-08T19:01:08.105+01:002015-06-08T19:01:08.105+01:00Stop arguing.Watch Keiser ep 767 (Sat 6th June).He...Stop arguing.Watch Keiser ep 767 (Sat 6th June).He's saying what we've been saying for years now sans the LVT .Mark need to stop pissing around AND GET ON THE SHOW.DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-8417033904486880492015-06-08T16:57:43.731+01:002015-06-08T16:57:43.731+01:00"There are no existing house prices so they c..."There are no existing house prices so they can't go up in fact..." And they can't go down either!mombershttps://www.blogger.com/profile/09650866436764567516noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-56838761131087909002015-06-08T16:55:20.907+01:002015-06-08T16:55:20.907+01:00An angle on the Ireland/Spain situation. I don'...An angle on the Ireland/Spain situation. I don't think there was meaningful agglomeration as estates were built with no amenities nearby, i.e. no shops, etc. No one wants to live in them becuase nobody does live in these 'exurbs'. There are no existing house prices so they can't go up in fact...mombershttps://www.blogger.com/profile/09650866436764567516noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-91463009106283341912015-06-08T16:51:42.745+01:002015-06-08T16:51:42.745+01:00House prices are strongly related to land prices a...House prices are strongly related to land prices and land prices in turn are related to the local economy. As the building of additional houses has little impact on the local economy there's no reason to suspect that new builds will lower prices. <br /><br />People just say 'its a supply and demand issue' without thinking it through.chefdavehttps://www.blogger.com/profile/14394720391421552371noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-54504179304527186582015-06-08T14:20:10.748+01:002015-06-08T14:20:10.748+01:00I can see an issue with statistics that could affe...I can see an issue with statistics that could affect the calculation of the average house price when new houses are built.<br />The new houses will be in more desirable location areas (less social housing) and bigger and so they will in fact be more expensive than the established houses. Therefore a nieve caluation of all house prices that does not take that into account will conclude that in the short term the average prices have gone up and incorrectly include the established houses in that statement of price movements.L fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-3761964605616460152015-06-08T14:08:57.205+01:002015-06-08T14:08:57.205+01:00D,yes another good point, you have to compare like...D,yes another good point, you have to compare like with likeMark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-59186874835695634382015-06-08T14:04:49.269+01:002015-06-08T14:04:49.269+01:00> Mark
I can see an issue with statistics th...> Mark<br /><br /> I can see an issue with statistics that could affect the calculation of the average house price when new houses are built.<br />Thenew houses will be in less desirable location areas and so they will infact be cheaper than the established houses. Therefore a nieve caluation of all house prices that does not take that into account will conlude that in the short term the acerage prices have gone down and incorrectly include the established houses in that statement of price movements.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-29308893528217528882015-06-08T14:04:45.173+01:002015-06-08T14:04:45.173+01:00Din, thanks more good examples
LF of course home...Din, thanks more good examples <br /><br />LF of course home builders can lose money !! They often overpay for the land. House prices generally will still be going up.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-17396340753957873332015-06-08T14:04:17.274+01:002015-06-08T14:04:17.274+01:00Yes the anomaly in Spain and Ireland was that they...Yes the anomaly in Spain and Ireland was that they didn't plan properly. In the UK they do and as I said before<br />"Barretts know that many people like house price rises so commission a report to say that their homes make an area more expensive to win over NIMBIES."<br />Of course they don't look to see what happened where they didn't get planning permission.L fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-91422332669076805572015-06-08T13:54:45.561+01:002015-06-08T13:54:45.561+01:00exactly Spain and Ireland built more than demand a...exactly Spain and Ireland built more than demand as you say, and as I said, and so they are an anomaly as Mark and I said. So it seems you agree also.<br /><br />You say that property developer could never lose money, well they couldn't lose money buying an empty plot of land and builing houses where people want to live, with proven demand could they. And that is the situation under consideration, where there is a known demand.<br /><br />Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-41878734382389787212015-06-08T13:41:28.080+01:002015-06-08T13:41:28.080+01:00Such as where?
Correlation is not causation.
If mo...Such as where?<br />Correlation is not causation.<br />If more houses = higher house prices then property developers could never lose money.<br />BTW the reason why there are many other examples as Spain and Ireland are one of the few countries where property developers were stupid enough to build more houses than people needed.<br />L fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-44230812829980715632015-06-08T13:34:12.830+01:002015-06-08T13:34:12.830+01:00> L Fairfax's question
People have tried a...> L Fairfax's question<br /><br />People have tried and succeded, by buying a piece of land and building lots of houses, in making cities with high house, (land) prices The west coast of the USA has many examples of that.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-58203685317308735992015-06-08T13:31:41.803+01:002015-06-08T13:31:41.803+01:00LF, 'other countries'???
Manhattan, Los A...LF, 'other countries'???<br /><br />Manhattan, Los Angeles, Tokyo, Sydney, Dublin, Barcelona? Can you find a single counter example apart from a few blips like Sesena or Irish tiger estates?<br /><br />Din good answer, thanks<br /><br />LF there was a crash so what - London was still more expensive than elsewhere and recovered quicker, ditto Dublin/rest of Ireland.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-51939676960016469502015-06-08T13:26:37.799+01:002015-06-08T13:26:37.799+01:00In London there are quite a lot of people on housi...In London there are quite a lot of people on housing benefit.<br />Also house prices do not always go up in London there was a crash 89-95.L fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-76086359941138297502015-06-08T13:25:00.757+01:002015-06-08T13:25:00.757+01:00Spain and Ireland are relavant but don't affec...Spain and Ireland are relavant but don't affect the general observation that<br /> more houses=higher house prices<br />Spain and Ireland were a special cases of building houses and offices that no-one wanted.<br /><br /> <br />The more general case under consideration is <br /><br />step 1 houses built to meet demand.<br /><br />Step 2 Aglomeration effects kick in and house prices go up.<br /><br />People have been building houses in London for thousands of years and the prices have always gone up and up.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-1540248999559847312015-06-08T13:24:26.907+01:002015-06-08T13:24:26.907+01:00PS if lots of houses are you need to make a city w...PS if lots of houses are you need to make a city with high house prices, why has no one tried to do it?<br />Buy a large area of land and build loads of houses and they all become expensive.<br />It worked so well in Spain<br />http://en.wikipedia.org/wiki/Sese%C3%B1aL fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-58553307291890668162015-06-08T13:15:53.086+01:002015-06-08T13:15:53.086+01:00@"And you cannot simply dismiss the LSE repor...@"And you cannot simply dismiss the LSE report without having seen it - how do you know they didn't have a control sample?"<br />They may have done but I have to judge on what it is reported.<br /><br />I am not denying that agglomeration happens however the idea that building more homes makes prices rise is counter logical.<br />It is certainly not what happened in other countries.<br />An alternative explanation could be <br />1) Barretts estimate how many homes an area needs and because they want to make money they always build less than that area needs so they can sell all of them<br />2) Therefore after Barretts build houses, prices rise.<br />3) If they hadn't built them prices would have risen more.<br />4) Barretts know that many people like house price rises so commission a report to say that their homes make an area more expensive to win over NIMBIES.L fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-22454357868326979442015-06-08T12:23:51.488+01:002015-06-08T12:23:51.488+01:00LF so you flatly refused to compare prices large c...LF so you flatly refused to compare prices large city vs rural? I find it helpful to always start with simple observed facts, I am not sure which approach you prefer.<br /><br />And you cannot simply dismiss the LSE report without having seen it - how do you know they didn't have a control sample?Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-47792139330982319242015-06-08T12:22:56.128+01:002015-06-08T12:22:56.128+01:00Maybe there are some short-term effects, but yes, ...Maybe there are some short-term effects, but yes, it makes sense.<br /><br />I've been in Swindon for 20-odd years, and it was a crap place to live when I first came here. As it's grown, we've seen a number of facilities created. We've now got 23 cinema screens, a Waitrose and a John Lewis store. And those JLP stores are here because the town has reached a level of population where there's enough posh people* that go to them to sustain it. The old bit of town now has a very fancy deli, a fancy wine shop, a couple craft butchers. That then feeds on itself - people will want to live there because of those things.<br /><br />I think it's also why I rarely work out of the area of the town now. There's an agglomeration happening with business software. London is just too pricey and you don't need software developers to be there, but Swindon's cheap and close enough.<br /><br />*John Lewis is sometimes the best value place to go, but it has a "posh" reputation. Apple stuff is often the same price as Apple, but with a better warranty, for example.Tim Almondhttps://www.blogger.com/profile/13369256383976094670noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-82043741167642418462015-06-08T12:16:03.062+01:002015-06-08T12:16:03.062+01:00There are lot more houses in rural Ireland than th...There are lot more houses in rural Ireland than there were a few years ago and prices in both rural Ireland and Dublin have have dropped since then by quite a lot.<br />This "research" how no control it doesn't look at any villages where the Nimbies won.L fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-19522245345184875112015-06-08T11:53:58.960+01:002015-06-08T11:53:58.960+01:00LF why do ask me? Why don't you look up prices...LF why do ask me? Why don't you look up prices in Barcelona or Madrid compared to rural Spain, or prices in Dublin compared to rural Ireland? Them make up your own mind.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-43071672725042893682015-06-08T11:49:44.278+01:002015-06-08T11:49:44.278+01:00@"More people = higher land prices.
More home...@"More people = higher land prices.<br />More homes = more people<br />Ergo<br />More homes = higher home prices<br />"<br />What about Spain and Ireland?L fairfaxhttps://www.blogger.com/profile/12274756119129254373noreply@blogger.com