Why have housing costs rose so much in the past decades?

Question

Why have housing costs rose so much in the past decades?

In: Economics

Answer 1

In canada we have roughly the same amount of houses scince the 70s and more then double the population. Simple Supply and demand it would seem, but the issue gets more complicated municipal governments, provincial governments, and the federal government have made it exceedingly difficult to build houses. Soooo much more money needs to be spent. I’m a carpenter who builds all kinds of structures and I can tell you right now the amount hoops you need to jump through all need a professional in their own field who will charge a lot. Example from my last job build the house 160k, septic 30k, electric 20k, plumbing and heating 40k, this is around 250k and we haven’t gotten to windows, doors, or interior finishes, kichen, bathroom or thermal efficiently testing. But the house after its approved and its appraisal will show a value of 200k total cost almost 500k, in our area you can buy almost 3 for that price adding to the devide with population vs number of houses, so in short the issues are with the authorities allowing a bottleneck and people of all trades taking advantage of it as well as people just don’t want to build their own house anymore. You used to be able to just order a house from a store and everything would just show up diy typ thing. Here https://www.npr.org/2018/10/20/657770791/sears-is-fading-but-memories-of-its-mail-order-homes-endure

On and added not: inflation has very little to do with house prices comparatively to average salary. Mortgages went from 3-5 in our grandparents age to 10-15 mabie as high as 20 for our parents and young people now days can get up to 30 year Mortgages…… witch is insanely crazy it takes one person 3 months to put up a house themselves, 4k in tools ( if you want the best. about 60k in materials for most 4 bedroom 2 bath attached garage. Everything else is a bit of land, local administration requiring a ticked professional to do their specific service and take out permits then have it inspected.