The high asset prices tend to have a positive effect to the society in short term, as property owners believe they get much richer so quickly they are more willing to spend as well as to borrow, encouraging domestic spending, throught stronger retailing and other consumptions. If in the long term house prices stay high (let's say more than 10 times medium annual salary for an average home) Then the young population will be of course more difficult to get onto the property ladder. Young people might stay at parental home for longer, and have to pay rent for longer. One important consequence is that couples will probably form a formal union later and have kids later. Many people stay in education until their early 20s nowadays and if couples struggle to get a home for them in the next 10 years or so, women will have lost most of their child bearing ages. In countries where young people are most difficult to get onto the property ladders - Japan, Italy, Spain, Hong Kong etc. also have some of the lowest fertility rates. Resulting population decline and more rapid population ageing.
2006-07-14 07:12:47
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answer #1
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answered by demographer_uk 2
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There could be 2 reasons for young people being priced out of the housing market:
1 This is a temporary situation and soon prices will be affordable to more people
2 This is because people are buying property to rent out.
If it's the first option, then just wait it out for a while.
If it's the second option, there the gap between the haves and have-nots will increase faster. There is historical precedent for many people not owning the housed they live in (and indeed the land they farmed). And not all of these situations were resolved by revolutions. What will definitely happen is a change in the way most people think, an adaptation.
There are other solutions. In Singapore for example, government build nice flats that are leases (for 99 years) to eligible people, and couples getting married for the first time get a substantial subsidy. Furthermore, after a period of time, they can then 'resell' the flat and pocket the capital gains. Of course, when the policy started, people had to learn to live in appartment blocks instead of villages, nowadays young people tend to live with their parents until they get married since they are eligible upon marriage or after a certain age. So people have to adapt. Also there is redevelopment of bits of land, including pulling down of some buildings so they can be replaced with taller ones, to cater to a rising population.
I guess that if the second option is correct, in the short run more young people will live with their parents; in the long run anything is possible
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2006-07-11 19:53:07
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answer #2
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answered by ekonomix 5
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Hi there, I have no specific knowledge of the English market but I think that the market will self-regulate at some point.
From my own experience (I am a real estate developer) I can say that one possible development would be to find cheaper ways to build a house (new locations or materials). As long as there is a certain amount of capital waiting to be invested in the construction of houses there will most certainly be someone ready to satisfy the demand. Let us also not forget that in the communication era, distances seem to lose importance so more and more people are not tied to a fixed working space.
2006-07-11 12:19:17
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answer #3
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answered by Trilc 1
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Housing prices move in fits and starts. I live in San Diego, where the average price for a single-family home is around $650,000. The average worker is making around $50,000, and just like in the UK, no one can afford houses.
But prices are set by supply and demand. Once a $650,000 house is too expensive for anyone to buy, the price will drop over time to absorb the houses that are being sold. People have made fortunes and will lose fortunes gambling on real estate here. Eventually though, housing can only cost what people can afford, or who will buy it? If you need to sell your house, and no one will pay more than $100,000, then that's what it's worth.
In California, people make ends meet with both parents working, working second jobs, etc. It is definitely a strain on our life styles.
2006-07-11 14:49:16
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answer #4
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answered by Karl the Webmaster 3
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I agree with demographer_uk's reasoning. In Switzerland, only 35% of the population owns the property they live in. In Geneva, it is as low as 16% only (year 2000 statistics). It is not uncommon to have mortagages that last for 50 years, which means when the parents passed away, the children will pick up the mortgage repayment. This pressure does seem not to favour young couple to procreate and Swiss population is definitely aging. Another side of this phenomenon is that, many people who knows they could never afford to buy their own home, spend their money instead on cars.
2006-07-14 08:40:09
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answer #5
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answered by Anonymous
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In regards to your main question, high asset prices have always tended to spell out "inflation" because of the demand-side economics that dominate a commodity or industry. In the case, of affordable housing in England... because suburban sprawl is a non-issue - they really cannot afford to give up major tracts of farmland to new housing developments - it will take a creative revitalization of community to make the QOL for England's youth take a turn for the better... where attainable equity is assured. Though the sociometric values are tied to culturally-based initiatives, there are also questions of resource expenditures & developmental costs, though usually these can cannot stand as long-term deterents.
2006-07-11 16:12:30
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answer #6
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answered by cherodman4u 4
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Generally speaking, high asset prices cause a more unequal distribution of wealth: people owing real estate get all the time 'richer' and those not owing will find it ever more difficult to acquire it. Society might face more frustrated and disappointed people. And that in turn could lead to social strains in one way or another
2006-07-13 08:56:50
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answer #7
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answered by misterteacher 1
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2016-12-10 04:54:07
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answer #8
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answered by ? 3
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it would effect really bad
2006-07-11 21:34:01
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answer #9
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answered by fzaa3's lover 4
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