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Increasing Housing Supply Will Not Make Property Cheaper


 

The most basic economic law of supply and demand may not apply to real estate, according to Professor Laurence Murphy from the University of Auckland.

At Sydney University’s Festival of Urbanism, Murphy demonstrated that rapid price increases can occur in spite of high levels of dwelling supply.

IN REACTION TO THE RESEARCH, PROUD ECONOMISTS EVERYWHERE ARE HAVING AN EXISTENTIAL CRISIS

One of the first things you are taught in economics is that the more of a good you supply, the less competition exists for a particular unit of that good, and so its price should come down.



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