- cross-posted to:
- canada@lemmy.ca
- cross-posted to:
- canada@lemmy.ca
the housing crisis has been created by banking practices that have directed excessive amounts of credit into the property market, and especially residential mortgages. As a result, buyers can bid prices up to ever-higher levels, resulting in a market where people must pay more for the same type of housing. Hence financialization can be defined as an inflationary tendency in the housing market that is induced jointly by banks’ desire to expand mortgage lending and buyers’ confidence that the value of their properties will rise.
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However, the image of a bubble bursting and prices returning to a more rational “equilibrium” level does not seem to apply to the housing market. Because housing is a necessity, people are willing to pay high prices for it. Bidding wars can therefore persist even when relative supply grows, so long as credit markets enable them.
The strawman is taking “supply is an issue” to mean that “dwellings per capita is going down”. Or to assume that stating the former means stating the latter. Or to assume that the former implies the latter. Whatever framing you prefer.
If you disagree this is strawman, that’s fine. Maybe there’s a bette name and we can call it something else, sorry for the confusion. The main point is that “dwellings per capita is going down“ is not representative of the view that supply is a factor in housing affordability.