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The housing crisis - why house prices are so high!

rpwills

A good explanation of why house prices are so high from Paul Claireaux on Twitter.


In essence if central banks keep interest rates close to zero, which is what has happened, then people look for gains elsewhere. With very low interest rates, borrowing to buy property goes up and pushes up house prices.


When interest rates go up then the cost to borrowers is far higher as the amounts borrowed have increased substantially. Obviously this is a problem!


But the zombie idea that we need to increase the supply of houses still refuses to die!


Look at the link below for the full details.


https://twitter.com/PaulClaireaux/status/1695448247865638959

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