Re:Billions in 'unknown' funds flowing into Canada's housing...
by simonh on Friday July 30, 2021 @07:19AM
(#28006750)
It doesn't take much money at all to drive property markets sky high. All it takes is a tight property market, restricted new supply and a few well capitalised investors.
Say a town has 1,000 houses worth $200k each. The housing stock is worth $200m. If 10 houses sell for $220k, those 10 buyers spent an extra $200k split between them, but the notional value of the housing stock went up by $20m.
There doesn’t actually have to be an extra $20m in the economy if the town. It only takes a few people with money to invest to drive house prices sky high.
Say a town has 1,000 houses worth $200k each. The housing stock is worth $200m. If 10 houses sell for $220k, those 10 buyers spent an extra $200k split between them, but the notional value of the housing stock went up by $20m.
There doesn’t actually have to be an extra $20m in the economy if the town. It only takes a few people with money to invest to drive house prices sky high.