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by JumpCrisscross
3806 days ago
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> My parents rented the family home in Paris for 45 years, and although they did buy a seaside flat and a cottage in the country in the 1970s, their value has only kept pace with inflation American home prices only started rising, in real terms, after WWII [1]. This is driven by people wanting to drive more income to buying land, i.e. treating land as a superior good. Growing government intervention is also a cause. In the long-run, real house prices appreciate at the rate of inflation. This effect is stable across countries, cultures, and centuries [2]. It vanishes in the short term amidst the noise of credit markets. Can't find the source at the moment, but the most fascinating study on the subject looks at asset prices in Austria-Hungary and surrounding states. The story is uncomfortably familiar. Decade after decade, credit-fuelled gains were safeguarded in the form of development restrictions. This served to transfer wealth to the landed elites. [1] https://www.dallasfed.org/assets/documents/institute/wpapers... [2] http://www.amazon.com/Houses-Historical-Analysis-Property-Pr... |
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Some one should tell this to Canadians. Since the early-mid 2000s, house prices have been rising much quicker than inflation, to the point where people think homes are an 'investment' that will always rise, leading to a massive housing bubble (also propped up by foreign buyers, many of whom are using land to launder money gained through corruption, and Canadian banks/government just look the other way) and also unaffordable housing for young prospective buyers and tenants.