on another layer of thought, what is the "best use" of land...? skyscrapers for pencil pushers working for some toxic product or veblen good company? or land used to grow organic foods? urban gardens or a liquor store? I like that he brought this up, the golf courses, ugh.
Why does land increase in price at 10% per year, but building only at 3%? If land has 3.3 times the return, of course it's more profitable, you've defined it that way
@@SpeedKatMcNasty building increase in value due to demand and supply just like everything. If there is more demand due to migration, building will increase in price much faster than inflation. In US as a whole inflation is about 3% and building increase in price at about 8%, three times the inflation
@@tedarcher9120 well, yes and no. A building is like a TV, if demand for TVs increases, then the factory can start churning out more TVs; the price of the TV might rise temporarily, but supply will quickly catch up. A house, like a TV, is not limited in supply. If the demand for housing rises, you can build more houses. Land is not like this, if the demand for land rises, you can't just go out and build more land. The value of the land has no choice but to rise.
@@SpeedKatMcNasty the problem with your analogy is that tvs are used for 5-10 years, and building for 50-100. In the terms of thousands of years yes, supply will equalise, but on human lifetime it's just not the case. Even when you build at max speed right now, population can increase faster than you can build for decades, and building still rise in price insanely fast
@@tedarcher9120 buildings don't really rise in value like that. It does not make logical sense. If buildings appreciated with time, I should be able to go out into the desert where no one lives, construct a bunch of buildings, and the value of those buildings should rise over time. Obviously that's dumb, because what is rising in value is not the buildings, it's the land. It is also certainly not true that it is impossible to meet housing demand. The 2008 crisis was caused by too much housing supply. Buildings are cheap, quick, and easy to construct.
on another layer of thought, what is the "best use" of land...? skyscrapers for pencil pushers working for some toxic product or veblen good company? or land used to grow organic foods? urban gardens or a liquor store? I like that he brought this up, the golf courses, ugh.
So basically make yourself as productive as possible than get yourself on the best land
How does the fixed cost vs the marginal cost so of Infrastructure effect the numbers?
Why does land increase in price at 10% per year, but building only at 3%? If land has 3.3 times the return, of course it's more profitable, you've defined it that way
Because a building can only increase in value due to inflation. Land increases in value due to increases in scarcity and in inflation.
@@SpeedKatMcNasty building increase in value due to demand and supply just like everything. If there is more demand due to migration, building will increase in price much faster than inflation. In US as a whole inflation is about 3% and building increase in price at about 8%, three times the inflation
@@tedarcher9120 well, yes and no. A building is like a TV, if demand for TVs increases, then the factory can start churning out more TVs; the price of the TV might rise temporarily, but supply will quickly catch up. A house, like a TV, is not limited in supply. If the demand for housing rises, you can build more houses.
Land is not like this, if the demand for land rises, you can't just go out and build more land. The value of the land has no choice but to rise.
@@SpeedKatMcNasty the problem with your analogy is that tvs are used for 5-10 years, and building for 50-100. In the terms of thousands of years yes, supply will equalise, but on human lifetime it's just not the case. Even when you build at max speed right now, population can increase faster than you can build for decades, and building still rise in price insanely fast
@@tedarcher9120 buildings don't really rise in value like that. It does not make logical sense. If buildings appreciated with time, I should be able to go out into the desert where no one lives, construct a bunch of buildings, and the value of those buildings should rise over time. Obviously that's dumb, because what is rising in value is not the buildings, it's the land.
It is also certainly not true that it is impossible to meet housing demand. The 2008 crisis was caused by too much housing supply. Buildings are cheap, quick, and easy to construct.
Reading through the numbers to do the exercise a terrible choice for a video and even sped up is a painful waste of time.
I couldn't seem to make sense of the numbers