Re:Australia's Housing Frenzy
by paganel on Saturday November 25, 2017 @06:34PM
(#15778589)
> Rents are set by wages.
That is incorrect. Loose credit most definitely affects rents, as in more people can now afford to buy real-estate (houses, apartments), that reduces the supply of available places to rent (assuming no new constructions take place, for the sake of the demonstration), and generally speaking a reduced level of supply has been accompanied by higher prices, in this case higher rents.
Re:Australia's Housing Frenzy
by jpatokal on Saturday November 25, 2017 @06:44PM
(#15778614)
Yes, the supply of rental is affected, but the previous poster's point was that demand is anchored by reality (wages) and not speculation (bank loans).
That is incorrect. Loose credit most definitely affects rents, as in more people can now afford to buy real-estate (houses, apartments), that reduces the supply of available places to rent (assuming no new constructions take place, for the sake of the demonstration), and generally speaking a reduced level of supply has been accompanied by higher prices, in this case higher rents.