Right, that works in theory, but in the real world it’s not happening. Once supply is increased, the price should go back to a lower equilibrium, right? So why isn’t that happening anywhere in the world? Because it’s a real estate bubble and speculators are buying because the price is high. Real estate prices drive rents not the other way around. They don’t care if the buildings are half vacant as long as they can sell them later for an even higher price. Demand by renters is irrelevant.
> Right, that works in theory, but in the real world it’s not happening.
This is a fair reasonable and response to the article. In essence you are arguing: the housing market can act irrationally and is seemingly disconnected from the underlying asset. Furthermore, people get hurt by these spikes in prices.
The reason I responded to your original comment was not to pick apart who is right but because you seemed to be attacking a point that the article didn't make.
