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Chris, you're quite right that changing the stock of a highly durable asset takes time, but that doesn't mean it's worth doing. By analogy, cutting carbon emissions for one year only wouldn't have much of an effect on climate change, but sustained cuts definitely would.
The fact that these changes are not immediate probably is a reason why it's hard to generate enough political support for them, but that's a different argument.
The fact that investment expectations seem to be an important factor in housing demand is reason to be sceptical about effects derived from comparing stock levels to prices. Investors expect prices to continue rising in part because supply is so constrained, but if government could suddenly and credibly commit to a much higher supply those expectations would be undermined and housing would look much less attractive an investment. Again, there are clear reasons why governments can't or won't make that kind of commitment, but that's very different from saying that "supply doesn't affect prices".
On cutting house prices
Ian Mulheirn, echoing Kate Barker, writes: It is very unlikely that the perennial wish of housing commentators to simply ‘build more houses’ will make any meaningful dent in prices. Many people think this is counter-intuitive, so I’ll try to explain why it’s not. It’s because flows of supply a...
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