Yep. The shortage is overblown. Just look at past crashes (e.g. Ireland, Spain, etc). The crashes weren't caused by oversupply of housing, but a credit shortage. After the crash the so-called 'shortage' magically disappeared and people stopped talking about it (until the next boom).
Near my old house there were large areas of land that have sat empty for 20 years through successive rounds of planning permission. The reason is very simple:
You can buy land for X. You can spend Y to construct housing on it, and sell it now for Z, or you can sit on the land, safe in the knowledge that housing policy means prices will keep rising, and then you can spend Y+inflation, and sell it for Z times a factor far higher than than inflation.
If you finance X via investors or loans, this is effectively leverage. You finance Y the same way, but short term during construction, so you get a leveraged return on the growth of house prices in return for investing to buy only the land.
Couple this with constraining supply by sitting on underutilized land.
Another of the developers in the same area has still only built about one third or half of the buildings they're meant to build on another set of parcels that were first also available 20 years ago. They have no incentive to rush until investors want to exit.
I don’t know your particular area, but I have experience buying and selling raw land and it’s a much more unique and niche area of real estate that fewer people are competing in. Are you sure it’s actually zoned correctly and doesn’t have latent disputes?
I can give you plenty of stories of people who bought an empty chunk of land for $350k and then 20 years later sold it for around $350k. They would’ve done better investing in Pokémon cards (or anything).
Add on the flip side developers usually want to move fast and cash in now, in my experience, not do what you’re describing.
And, yes, one of the plots has had planning permission for years, and had the owners re-apply regularly for buildings in the 40-75 floor range, and the council has fallen over itself to approve it each time. The other involved a lengthy planning process with a plan agreed around 20 years ago for developments that are still not complete.
What you're describing makes sense in a market where there's plenty of options. In London land is scarce, and developers hoarding it makes it scarcer, and so both land values and housing prices have skyrocketed.
Where I live the ratio of dwellings to households has increased during the three decade long property price boom.
The most significant cause in my opinion is the financialisation of housing, fueled by three decades of ever decreasing interest rates allowing those with capital to use leverage to accumulate more (often removing them from the stock of permanent housing).
Higher interest rates are the catalyst that solves this problem.
> It always comes down to we don’t build houses fast enough. Why?
because we can't say that real estate is basically a cartel [1] and that big cities (where everyone is supposed to move because all the jobs are there + RTO) have staggering levels of empty houses (e.g. 19% in Paris [2]), and god forbid to apply any type of policy to adjust the situation.
The situation is significantly more complicated for Paris and Berlin which are touristic hot spots on top of being big cities.
For exemple, the 19% you quote in Paris include occasional occupation which is partially driven up by the insane price of hotel for which people who need to spend time in Paris regularly have to compete with tourists.
But I disagree with you on the absence of policy to adjust the situation. Paris has been doing a lot in the past few years.
The city severely limited the ability of owners to turn their property into short term rentals to try to increase the long term rental offering.
Then there was the rent cap but its impact is more difficult to estimate. On the one hand, it made renting properties less interesting and probably incitated some owners to keep their appartments empty. On the other hand, it severely limited the possibility of borrowing money for buy to rent project as it doesn't make much sense financially and therefore lowered the market pressure for people buying to live.
Last year, they significantly increased the vacant property tax. It's calculated on the rental value and quickly raise to 34% of it so it rapidely doesn't make sense to keep an appartment empty if you are not going to be in Paris very frequently.
Humans aren't rabbits. Humans tend to have children in inverse proportion to the amount of grass, poorer people having more children than richer ones. Of course it's not a direct correlation, or a simple one, but the effect is there.
More houses in locations people want to live in, yes. In the end, even leaving house prices aside, a larger population needs more housing, and the UK has been underbuilding several tens of thousands of units a year for decades.
