[beej71]

The claim is that if you increase supply the price will drop. The counter-example is a case where supply was increased and the price doubled. The question is why did that happen?

It very much looks like the "just build" model is insufficient to explain what's happened in that case.

[HDThoreaun]

Demand for housing increased faster than supply. As people gain wealth they demand more housing, so just looking at population changes doesn’t tell you much about housing demand.

[beej71]

Where is the demand coming from, is what I'm getting at. Because it's not from the population on this case, it would seem.

[HDThoreaun]

First, lets remember that housing is extremely inelastic, Demand doesnt need to outstrip supply by very much for people to start bidding up properties and prices to double.

Ive never been to Australia, cant speak to the specific situation there, but where I live it is very common for people to have roommates. Many people even share bedrooms to save money. Post covid labor prices for the lowest paid workers has increased substantially. These low paid workers are the most likely to have roommates/shared rooms, and one of the first things they do when they get more money is move into places of their own. Where I live at least you also see the opposite happening. Since housing supply is legally unable to expand people who previously would be living on their own now often find themselves needing roommates, pushing housing demand down.

There are also many people who want second homes and tons of other ways for housing demand to shift without changing population.

[WarmWash]

Because demand outran the supply. Prices drop when demand falls below supply. Not when new supply is added.

[danaris]

Diiid you read what they said about Australia?

> the number of dwellings increased by 19% while the population increased by a smaller 16%

That is the opposite of demand outrunning supply.

[WarmWash]

People/businesses own multiple homes.