| ▲ | paulddraper 4 hours ago | |
You’re saying that prices are bounded by construction costs. Sure, as with every other good. But there’s a long way to go between current property prices and raw construction costs. | ||
| ▲ | jjav an hour ago | parent [-] | |
> But there’s a long way to go between current property prices and raw construction costs. How much? Searching a bit suggests that net profit margin in housing industry is about 8.7% Consindering an investor can get ~3.75% in zero risk T-bills without lifting a shovel, that's about an extra 5% net profit to get involved in building housing. Which isn't nothing, it's a decent profit. But I also wouldn't call extra 5% a huge difference. | ||