What's wrong is that there is no profit in selling real estate and housing at below market value, by definition. And in places like the bay, market rents are not affordable to an increasingly large population. Hence, the greedy perception. Developers are acting in self interest and the old system of financing predicated continuous wage growth.
At least in the UK the price per square foot greatly increases after each new build that replaces an older one. Surely prices would go down?
You can even verify yourself. Go on a property portal such as Zoopla or Rightmove and compare the cost of a new build and old build in the same area. I have yet to find one where the new build is cheaper per square foot.
> But how was the cost of surrounding old builds affected?
Not sure I understand?
Edit: Anyway, the poster I was replying to was making the point that these towers are alleviating demand and subsequently pushing prices down, which is not happening.
I meant "people who might have bought an old home instead went to the new one".
If I have a market of 10 dumpy old cars, people will pay X for it. If I destroy 1 dumpy old car and add 2 brand new cars, people will pay more for the new cars (like your new building) but the dumpy old ones will be slightly cheaper.
That is not what I wrote. I said the prices with the tower would be lower than prices without the tower, which is not the same as saying prices would decline.
Increasing the supply of something simply does not cause price increases. If the price increases, it's because demand is increasing even faster than supply.
At this point there’s no way you aren’t pulling my leg. The research paper showed that increasing the amount of floors increases the price per floor. Are you saying that these towers control demand? So if they lower the amount of floors then suddenly demand is going down because they are cheaper?
Also I do hope you know the context of my posts relate to the UK market?
