Landlords are for the most part capitalizing on these broader market / regulatory trends.
In London, where housing delivery has long trailed short of need, the population rose by 3.4 for every new home.
This mismatch of housing supply and need has had drastic consequences for affordability. Rents increased 2.0 per cent per year in England on average over the last decade, according to data from Hometrack. Growth ranged from 2.4 per cent per year in London, where housing delivery was lowest relative to population growth. In the North East, by contrast, housebuilding all but kept pace with population growth and rents grew just 0.7 per cent per year.
https://www.savills.co.uk/blog/article/309803/residential-pr...
The ratio of house prices to earnings, another basic measure of housing affordability, increased from 6.9 in 2010 to 7.8 in 2019 across England. In the North East, where we delivered almost as many homes as people, homes became more affordable. In London, where housing supply falls far short of need, the ratio of house prices to earnings has ballooned.
When you think about it, even in areas like London the housing market is not liquid nor uniform enough for the offer vs demand model to apply. You don't rent/buy home like you buy strawberries.
In about 1 year there was no significant increase in demand and the supply stayed the same but everybody saw its rent increase.
Edit: Also we should not mix-things up, the housing market is very different in outliers like London compared to the more global market. Here we're in the context of those outliers (Paris, London, etc.)
Grandparent says: "get rid of all these complicated rent control and rent freezes and affordable housing scheme..."
I think this is fertile for discussion. Rent freezes didn't work in Argentina (extreme example), my opinion is they don't work anywhere. But oversupply does reduce prices, as happened with evergrande in China.
IMO interest in not having an oversupply bursting a bubble is precisely what parent is talking about.
Again, in a very absolute way of looking at life.
Argentina is a great example. That said rent is also cheap in Buenos Aires. But I think that is due to the economy rather than rent control.
You’re right in that affordable housing in any real sense would be MASSIVELY unpopular with voters. You’d be looking at cutting values in half to reach 2000s levels of affordability or 75% to get to 1970s levels.
People are really bad at working out constant dollars and have loans, as long as the nominal value is steady or going up slightly, they don't really care if the absolute value has dropped because of inflation.
Citation definitely needed.
In my opinion, cheap credit (i.e. low interest rates) is the primary culprit. It has created an awful lot of 'artificial demand' for properties as investments as opposed to demand for properties to be used as homes. In most markets I look at, the proportion of underutilised properties has been rising (second homes, short term rentals, land banking, etc).
Here in NZ the sharp rise in interest rates caused a sudden and significant increase in homes available for sale and homes available to rent. Where did they come from?