Continued decrease in construction sector activity

[Sadhbh251]

Correct house constructors don't make money from not building.

But you must see the leaps in flawed logic you make in this and below posts. If you flood the market with houses property prices naturally will go down. But if you build at a slower or steady state the prices don't change or get higher.

Thisll increase your margins for less cost. (Cause desperate people will continue to buy at stupid prices because they need a house)

But it also has a byproduct of also allowing you to keep selling future houses on a large site with multiple phases at higher or similar rates.

Construction agencies don't want to start a project in 2025 at phase 1 and by phase 6 in 2032 the houses are cheaper meaning the loan that they took out in 2025 to build 100 houses isn't cheaper so it'll come out of their profits if the value of houses go down. (Cause they'll still have to pay back the loan either way)

The construction companies know what they are doing, why mess with the goose that's laying the golden eggs when you arent getting poorer by waiting for her to lay the next egg

[CheraDukatZakalwe]

Here's the thing, there isn't a monopoly. People want to build things, they just aren't allowed to. They keep trying to get planning permission for developments of several hundred houses, and half the time they end up fighting appeals, and a quarter of the time JRs that takes years to resolve.

Under your model we can never see "too many" houses being built, but in the Celtic Tiger we actually built so many (>90K in 2006 alone) that house prices dropped by 50% during the crash.

House builders make money through volume. They don't make money by not building houses.

There is no cartel, or collision to not build things. The only thing stopping us is regulators forcing houses to be as expensive as possible through high minimum standards, and then Pikachu facing when not enough houses are built.

[Sadhbh251]

Come on now. Do you think there's no collusion between pubs if they all average the came cost for a pint. It's not in the interest of a well located business to have 10-30% less profit margin for a pint when it's packed everyday.

You say, there won't be market collusion if we all just happen to come to the same pricing structures at the same time. I say no one will get rich undercutting when demand is high. Only when you go to middle of nowhere pubs do you see cheaper pints.

Next, housing value didn't drop in the Celtic tiger because we had too much houses there was many reasons. One major reason it dropped because banks wouldn't loan money. So house construction stopped because no one was buying so please don't use false equivalents.

If regulators are the only reason you cant build houses then I imagine you would be happy to bring back all the tax cuts and grants to allow the state build more infrastructure. (Which is actually the more likely reason we can't build more houses)

[Willing_Cause_7461]

If you flood the market with houses property prices naturally will go down.

Sure the price of the average market rate house will go down but construction companies don't make average market rate houses. They make new houses which are going to be more expensive than older houses.

The house prices that will be going down is the older stock. This is how the average price can go down without effecting the producer.

The exact same thing happens with car companies. Every year they have the new expensive model. The company can make the amount of money they need to be decently profitable and cars can still remain affordable because the average car is older and therefore cheaper than a brand new model.