[KellyCriterion]

This is theoretical MBA101 speech:

In reality, those ideas do not apply to the housing market, esp. as there is no real competition; and because the demand is absolutely inelastic (if we are already applying in MBA-wording universe)

Also, that this is true you can see if you compare to housing markets which "are more free than the Australian"

[jjmarr]

The regulation is single family zoning. Zoning makes it impossible to stack high rise apartment buildings in the areas that people want to live in.

[bpt3]

People want to live in those areas because of the lower density. Remove that and they become much less desirable.

[Sankozi]

Of course demand is elastic.

Do you think, people will migrate to a city with an unaffordable housing (unaffordable for them)?

Unless you are living in North Korea, the competition is also there.

[KellyCriterion]

No, it is inelastic:

- inelastic means the demand is more or less independet of the price; you can't "just stop renting & living" if prices are going up, your options to bypass are highly limited -> therefore its called >inelastic<

[Sankozi]

You can "just stop renting" and move somewhere else.

Housing demand is less elastic than, let's say, potato demand, but it's not "absolutely inelastic" as you have said.

[AlexandrB]

Good transit and road infrastructure also both make demand more elastic because the choice of where you can live without changing jobs expands.

[KellyCriterion]

In MBA101-bobos world this is true in theroy, in practice its not. (let me guess: You do not have children, yet, right?)

Thats always the biggest difference:

In theory, there is no difference between practive and theory - but in practice, there is ;-)