Housing Market
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Housing Market (n.) The only market where governments deliberately create inflation.

This house believes that the best way to protect the core wealth of the middle classes is to severely restrict the housing market so that the construction of new houses is almost impossible.

Yes, this means house prices will be high, that young couples won't be able to afford a new home, that the construction industry won't boom, that the mortgage industry will be slow and boring. It also means that cities won't see their hearts left to rot, that we won't see the green zones eaten up by new houses, that people will live concentrated in cities and use public transport rather than drive to and from work every day.

It also means that house prices will be based on something real: scarcity. When a family invests in a house, paying their mortgage each month, and the state allows the construction of new houses, this deflates the value of existing houses. In effect, it is deliberate inflation, a form of wealth distribution that takes from the middle classes to give to the poor. It is notable that the construction of new houses in upper class residential areas is universally restricted.

Countries that dramatically liberalise construction regulation tend to see a construction boom followed by a collapse in housing prices, followed by economic recession. A direct consequence of a liberal housing market is the widening of the gap between rich and poor, as tranches of the middle class are impoverished. Post-unification Germany would be a good example. So would California in 2007, followed by all countries that saw a housing boom: Australia, UK, Spain, etc.

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