More Blow-In Fodder..

[Jeremy]

DaveR - I know this is stating the obvious, but housing's kind of essential, isn't it? There's a pretty strong case for not leaving such things purely to market forces..

[ernesto]

oh no, not the "M" word again...you know who will pop up now

[StraferJack]

DaveR chose his examples carefully ? bread and shoes ? as examples of other ?stuff of life? necessities

But it?s trite because he knows consumers demand those prices go down but consumers are divided on house prices. (Many) ?Haves? want them to go up and ?have nots? need them to come down

Equally, if someone or a small minority were to locally buy up all the bread and shoes in SE London, somehow stop supplies from elsewhere and start charging them at much higher prices it?s obvious that there would be intervention

Other stuff of life examples are energy, water etc- all regulated and not left completely to the free market

[Parkdrive]

DaveR Wrote:

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> "Private landlords can pretty much ask what they

> think they can get, and it's been that way for

> many years."

>

> Like people selling bread, or shoes, or massages.

> Bastards.

Not at all like that but feel free to say so.

[DaveR]

"But it?s trite because he knows consumers demand those prices go down but consumers are divided on house prices."

I prefer to use the more traditional terminology - 'buyers' and 'sellers', in which case the distinction you draw looks a bit artificial (or to be more accurate, stupid)

"Equally, if someone or a small minority were to locally buy up all the bread and shoes in SE London, somehow stop supplies from elsewhere and start charging them at much higher prices it?s obvious that there would be intervention"

yes - because it's outlawed by Art 102 TFEU. Are you suggesting that 'someone' has bought up all the houses in London while I wasn't looking?

"Other stuff of life examples are energy, water etc- all regulated and not left completely to the free market"

Because they were previously monopolies, and, unlike telecoms for example, nobody has worked out how to make competition work when you can't build another National Grid.

"Not at all like that but feel free to say so."

So tell me how it's different? Tell me how a private landlord charging the market rent for a flat is different from a shop owner charging a market price for a loaf of bread, where market price = what someone is willing to pay?

London property prices are high because of market forces i.e. scarcity and high demand, and extra-market forces i.e. planning restrictions, land banking by developers, friendly tax environment for investment buyers etc.. Private landlords charging what they can get (and what they can get being a lot of money) is a consequence of high prices, not a cause.

[miga]

.

[StraferJack]

Let's assume this whole "simple supply and demand issue" is true and the primary if not only factor - let's go with a clear road ahead with no objections from locals, councils, planners etc

Builders have a free run at building houses to meet demand, from tomorrow

Now - what price should they go on the market for?

Or if it's a new wave of social housing, the likes we haven't seen before - what rate is that set at and what level of earnings are people excluded from qualifying?

[DaveR]

I think you're getting mixed up between fungibility and liquidity. An asset is fungible if one unit is much the same as another - a bar of gold, a barrel of oil etc. An asset is liquid if you can turn it into cash. However, the market moving against you doesn't necessarily make your asset illiquid - it just means you make a loss.

There are lots of imperfections and inefficiencies in the housing market, as in lots of markets, but in terms of market information, when a seller puts a house on the market the price and all the key indicators of value are known, and comparable with other houses on offer.

"it's a very inefficient market (given current transaction processes). Which, in my opinion, makes it a very bad advertisement for the efficiency of the free market."

This is a non sequitur isn't it? An inefficient (and therefore less free) market is a bad advertisement for the efficiency of free markets in general.

FWIW, even the most rabid free marketeer should be able to see that there are plenty of valid criticisms of the way the market for property as an asset class has been allowed to develop over the last 20-30 years by largely unthinking governments. And there are lots of good arguments now for interventions either to make the market itself work better e.g. free up more supply by loosening planning, or to push the market in a particular direction (e.g. tax penalties for land bankers and owners of vacant properties, or residency requirements for new purchasers). But that's a long way from saying that 'markets don't work' or that property is a special case where price controls are the only way forward.

[Loz]

StraferJack Wrote:

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> Now - what price should they go on the market for?

Whatever price the market will let them.

The point is, if this building keeps happening, then further down the line the prices will eventually come down when supply comes closer to demand. If London needs 100,000 new homes, then the first 50 built isn't going to affect the general price.

[ernesto]

shite.

[????]

Snorks we know 90% of you Jocks are died in the wool commie's so we'd expect nothing less than an absolute certainty in the power of the state and intervention, even from an apparent free spirit as you.

[ernesto]

if you want to see free enterprise and pure markets at work, then I would suggest a fuck off one way ticket to somalia or haiti where you can see how it works without the meddling of the state messing up the markets

[ernesto]

i formally declare this thread of the selected choicest cuts of undergrad economics and anecdote closed

[miga]

D.

[miga]

.

[maxxi]

miga Wrote:

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> ernesto Wrote:

> --------------------------------------------------

> -----

> > i formally declare this thread of the selected

> > choicest cuts of undergrad economics and

> anecdote

> > closed

>

> you're not the boss of me fascist

And apparently anecdote is the most reliable form of fact.