Why a housing supply boost might not solve issue of price

Conventional wisdom has it that if more homes are built, then prices will come down and the housing crisis will abate. But some economists say factors like interest rates and credit availability will have far more influence on prices in the coming years

10th October, 2021
Why a housing supply boost might not solve issue of price
Analysts at the Bank of England have also said that “scarcity of housing has played almost no role” in house price inflation since 2000

Ian Mulheirn has something to say that a lot of economists don’t want to hear. People desperate to buy a home, in particular those who feel locked out of the market, won’t like it either.

It boils down to this: boosting housing supply above the current rate will not solve the problem of high house prices.

The comments by Mulheirn contradict what students are taught on day one of any economics...

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