Be it having roommates, elderly parents living in, staying with ones parents longer, communes. None of them popular long term I think. Hence: supply

You can want a house, but if you can't pay the market price then there's no demand from you at that price point. So maybe you make a lower offer or look elsewhere.

Demand is simple. We're watching what low demand is like right now.

Inventory has been low (people like their locked in low interest rates), but it has been inching steadily up as people move, die, change or lose jobs, etc. The minute the supply significantly outstrips demand, the pricing will collapse.

Demand will stay low until the economy and housing market improves.

People in cities and colleges have done that for decades. Not just "roommate" in the Friends sense where you have 2 people living in a 2 bed flat, but roommate as in sharing the same room - indeed 20 years ago I knew of some places where there where 5 people sleeping on 3 single mattresses in a single attic in London, with nuclear-dub style bunk sharing.

Demand for what people want (a place to call their own without having to live with strangers) is far in excess of the supply, and has been for at least the 25 years I've been an adult.

The rich don’t need to cram more people in, everyone else does. True?

Some may argue that the rich help in the supply by building new houses, but that makes them even richer. If it doesn't, they don't bother (a point from this article).

No matter how nice a place people live, they always want it to be nicer. They want better schools, nicer parks, clean streets, quality infrastructure. They want to attract nice businesses and cultural institutions.

The problem is that doing this necessarily increases demand, and increases prices. Unless you are an owner, doing this risks pricing yourself out of your own home. So what can you do to keep rent down? Well, increase supply to match the increase in demand.

Now you have a new problem. Increased density puts pressure on the infrastructure and makes it a less-nice place to live. That park sure was a lot nicer when it was half as crowded. Those new restaurants sure were a lot nicer when you could actually get a reservation.

It’s a very difficult dance to keep all these things balanced. Ultimately everyone wants to make the place they live nicer, no matter how nice it is already. You can never try to manage this problem from the demand side unless you find a set of crazy people who love living in a sty.

Again none of this is something that benefits from heavily centralized control, unless you want cities to be expensive exclusive zones, and force poor people to only live in rarely built (and poorly maintained) government housing while the rest are forced out into sprawling suburbs, with just as restrictive building rules, which can only forever expand outward consuming forests and farmland + forcing more cars onto the highways.

Then everyone has to drive into the city for work, meaning a political base who doesn't care about downtown infrastructure like public transit that only serves a highly exclusive downtown.

That's a system where no one wins.

I'm trying to make sense of your argument. No matter how nice a vehicle people have, they always want to have a nicer one. But we don't see normal cars costing 50-80 years of your life to purchase.

A public park, a street, a school, these also depreciate, but most of them can not be thrown out and replaced like a car. They require constant maintenance. They also have nearly unlimited capacity for upgrades. The school gym can get new equipment. The street can be repaved. The park can get new landscaping. Wherever you live, the public amenities can always be improved. There is always demand from the residents to make those improvements.

Nobody ever tells their town to uglify the neighborhood. They always ask to beautify it. That means they are always asking to increase demand, and therefore to increase housing prices.

> Nobody ever tells their town to uglify the neighborhood.

Young people move out of towns until they are more or less ghost towns. During this entire process, real estate keeps increasing in value, although demand is steadily and predictably vanishing.

But, politically, we want to increase demand (by offering lower prices).

In the UK 8.5 million people in England are facing some form of unmet housing need. That's more than 10% of the population.

https://www.housing.org.uk/globalassets/files/people-in-hous...

> More than 1.9 million households are hosting a ‘concealed’ household – for example, adult children still living with their parents.

Even when it costs nothing, there's always a limit to demand. Just look at say a hotel breakfast. I could have 50 sausages, 20 cups of coffee, etc. I don't, despite it being costless.

It's not, though. That's the whole political contention. That demand is, because of high prices, not at the levels the population want to see.

Demand is defined as having desire and willingness to pay for a good or service. High prices maintains the desire in most cases, but chases off the willingness. That's the whole point of having prices!

> Even when it costs nothing, there's always a limit to demand.

Now you're describing a (technical) shortage: A situation where an external mechanism prevents price from rising. In a functioning market, buyers will pay more to stave off demand. But if price is forced to remain lower than people have the willingness to pay (free, in your example) then there is no control mechanism to see people back away from demand.

But that's not a problem in the housing market. If you have the desire and willingness to buy a home, you will have absolutely no trouble finding a home to buy. Price is doing its job.

The problem is for those who only have desire. They are not part of the demand, but that doesn't mean they don't want their desires filled. Hence the political push to see an increase in demand. i.e. Enabling those with only desire to also find willingness by finding a way to lower prices (which means addressing supply).

Now sure, if you offer $50m for a 1 bed house someone will sell you one, at the expense of the person only offering $40m. That doesn't mean there is no unmet demand.

Right, it doesn't tell us much of anything, but there does need to be some external mechanism that is getting in the way from transaction completion in order for demand to be unmet. A shortage is one example of such a mechanism, but there clearly isn't a shortage[1] in the housing market. Prices have risen just fine. There is probably some unmet demand in the fact that builders simply can't build fast enough — where people have the money in hand to buy and have a seller theoretically willing to sell, but can't do so because the place is not yet finished — however, there isn't a lot of evidence to suggest that is a big problem and it is definitely not the problem being discussed.

"I really want to buy a house but I cannot afford it" is not unmet demand. That is what we call dreaming. As before, demand is comprised of desire _and willingness_.

[1] Speaking in terms of a "shortage" in the technical sense. I recognize that, colloquially, it has become popular to use "shortage" to mean "The price is higher than I like", but that definition, while certainly appealing to emotion, is nonsensical when you really think about it. Literally everything is in "shortage" by that definition, making it a useless term (as useless as demand = everyone who wishes to have something). The technical definitions are actually useful, though.

I just did a rightmove search for rental in London and checked the first 8 adverts, every single one was added today except for one which isn't available until september.

Your definition of shortage seems very different to mine so there's no point in continuing.

I anticipate that 98% of available jets are used. And I certainly can't afford one. Does that mean there is a shortage of jets? What isn't there a shortage of?

> Your definition of shortage seems very different to mine so there's no point in continuing.

What, then, was the point of continuing earlier? We have been discussing the technical definition since the onset.

I respect your freedom to make up definitions on the spot as you see fit, but there is nothing that can be discussed about such definitions. Clearly you saw value in discussing what surrounds the technical definition earlier, as demonstrated by multiple replies. Why the change of tune now?

> What isn't there a shortage of?

Things which supply can increase to meet that demand.

How so? I acknowledged it and even agreed that there is probably some unmet demand in houses not being able to built fast enough. But, with time, they are being built:

> [What isn't there a shortage of?] Things which supply can increase to meet that demand.

Housing supply is increasing. We build new houses every day. Now you're contradicting yourself. The folly of trying to make up your own definition on the spot. The formal definition already carefully considered these issues. Why stray from it?

But, as before, there is nothing to suggest that the unmet demand is a big problem. Having to wait a year or two for the house you want to be built, while perhaps a little frustrating, isn't the issue under discussion.

The issue we're talking about is those who are unable to join the demand group because prices are too high. That's not unmet demand. They are not demand in the first place. They can't afford to be. Demand requires desire _and willingness_. Desire alone is not demand. Desire alone is simply dreaming.

The whole concept of demand wouldn't make any sense if you counted anyone who wished to have something. The entire fundamental basis of supply and demand is that higher prices stimulates an increase in supply and a reduction in demand. The reduction in demand happens because willingness starts to disappear as the price runs higher. In other words, people start tapping out when they can no longer afford something, thus a decrease in demand.

As discussed earlier, the political will is to see an increase in demand as we have a collective dream to allow more people with only desire to join the demand group — ultimately by lowering prices such that their willingness is gained in those lower prices. We don't talk about a reduction in demand in those political contexts because that runs entirely contrary to what is trying to be achieved. High prices already reduced demand. That's the exact opposite of what the people want to see.

Especially when the current political pressure is to increase demand. The populace are complaining that, because of high prices, they can't afford to be a part of the demand.

All the various government schemes in the UK and Australia (I have no idea about other countries) that are aimed at helping primarily young people to buy homes - low deposit schemes, part ownership schemes, tax discounts etc etc, they all masquerade as helping but they stoke demand and add to price inflation.

Or are you saying the only reason houses are expensive is because people refuse to live in cars in high enough numbers?

What do you mean by demand?

In the past a typical housing unit would be husband, wife, two kids. A 3 bed house. Divorce rates are higher now (better to be divorced than in an unhappy marriage - so that's good), so you instead you have divorced husband and one or two bedrooms for shared custody of kids, and divorced wife and one or two bedrooms for shared custody of kids

Thus what used to be demand for a single 3 bed house is now demand for two 3 bed houses, with no change in requirements

You are also right about cities, and not just any specific city. If you were born in London and get a job in Cambridge because you want to work for Astra Zenneca for example, that's a good thing. Having workforce mobility is a good thing, just because you are the son of a farmer doesn't mean you should be destined to be a farmer. You've also got people meeting and marrying people from outside their immediate geographic area, at least one of them will have to move.

There's then the social appeal of cities in general -- if you're the "only gay in the village" that's a miserable life. If you live in a city there's far more choice.

"living with parents" is on the increase, despite any "stigma".

> The number of families in England and Wales with adult children living with their parents rose 13.6% between the 2011 Census and Census 2021 to nearly 3.8 million.

https://www.ons.gov.uk/peoplepopulationandcommunity/populati...

Adults living with parents is not a good thing, and in the west it never has been. Adults should be independent, and learn to fly the nest and build their own lives.

Then you've got massive external immigration. As well as people moving from country and older mining towns, you have massive inward migration (in the UK this has reached an increase of about 1% population increase per year). This is a good thing for the economy (more workers, more productivity, more taxes), but comes with other issues - including more demand for housing.

This pressure group says there is too much airbnb

https://www.actiononemptyhomes.org/facts-and-figures

They say that over 97.5% of homes in London are in primary residential use, i.e not airbnb, not second home, not empty all year except for some wealthy oligarch coming for a couple of weeks.

The numbers might be slightly off as people are not reporting their use of airbnb, but

https://www.selfcatering.co.uk/reports/uk-airbnb-stats/

Claims just 50,000 airbnb homes in London, which is just 1.3% of the housing stock in London (and that 50k number includes those which are primary residential use but the current occupant moves out for a week if they get someone)

The UK takes in about 700k people a year net, and builds about 30k houses a year (which is probably about enough to cope with "natural" population growth.

Supply and demand. Dwellings get smaller (or subdivided) because people will pay more and get less. Landlords appear to solve the problem (and make a profit from the fact) that young people can't raise the capital to buy a full house themselves any more.

It's not the only factor - the jump to two-income households also raised prices massively and transferred a load of wealth to existing home owners back when that happened - but I'd say it's by far the largest factor today.