"If house prices fall, the middle aged and middle class will be in an uproar. [...] Perhaps even more critically, banks need house prices to rise, or at least not collapse."
"More quality housing would increase its stock, and with supply rising to meet demand, prices would fall. This would be great for young renters, bad for middle-aged property owners, bad for banks. Thus it is not likely to happen. Property prices, at an all time high, are not likely to fall, and if they do, expect the government to put a floor under them."
I couldn't agree more. I'm young and capital-poor, so this fact is a huge problem for me. I don't see a solution.
> I couldn't agree more. I'm young and capital-poor, so this fact is a huge problem for me. I don't see a solution.
Vote for politicians not obsessed with propping up the business and real-estate portfolios of wealthy middle-aged people? (assuming you can find such politicians)
It's not far removed from the public's mind. People know they're currently getting shafted. They have just been convinced that anything in the best interest of wealthy middle-aged people must also be in their best interest, because everyone thinks they will one day be wealthy middle-aged people.
I've been thinking recently that a political party that specificaly threatens to tax the old rich people in the future for all the stupid stuff they're doing right now might help to make this topic more relevant (thinking especially of climate change denial and propping up property bubbles that transfer rather than generate wealth).
It seems kind of far-fetched, but in the Netherlands people sued the government for not doing enough about climate change and won, and I think there's a youth group suing the government in the states about climate change too.
Not sure if the demographics work out politically though.
Of course, that's only nominal house prices that shouldn't fall. If inflation-adjusted real house prices fall, not really a problem. Perhaps a little more inflation than we currently have would be a good idea (4-5%).
Amen... in my country (Uruguay) they have a carefully managed inflation index... but it is meaninglesss.. housing went up 70%, what do I care if lottery tickets or vegetables go up or down 1%
"If house prices fall, the middle aged and middle class will be in an uproar. [...] Perhaps even more critically, banks need house prices to rise, or at least not collapse."
"More quality housing would increase its stock, and with supply rising to meet demand, prices would fall. This would be great for young renters, bad for middle-aged property owners, bad for banks. Thus it is not likely to happen. Property prices, at an all time high, are not likely to fall, and if they do, expect the government to put a floor under them."
I couldn't agree more. I'm young and capital-poor, so this fact is a huge problem for me. I don't see a solution.