I’ve been part of housing-related online discussions for a decade now, and everything reads like a wish-list.
- Majority of people own their homes. So it’s in their best interest for the housing prices at the very least not go down.
- Less, but still, some amount of people are buying houses with sky high prices. After a huge purchase, they will also do their best to ensure prices don’t go down.
- Another good chunk of people are waiting out to inherit homes from their parents.
All these people, in one way or another, will protect asset prices (e.g. voting for certain people to ensure nothing gets built). The only ways I can see it being resolved is:
- China-style benevolent dictatoresque commitment to surgical detachment of housing prices from the general economy (they’re trying, a lot of people are unhappy, but some progress is visible)
- Population collapse, to reduce the demand. But looking at Japan, metro areas will keep skyrocketing, because people will flock to the main cities even more
Any of the options will make a lot of people unhappy. A huge political no-go zone.
All the talks about allowing construction and streamlining the process have been circulated for a decade+ at this point. But incentives for people aren’t there. “I got mine, don’t care about you” is the general attitude of majority of people.