Wonder what effects will be on cement machinery
Wonder what effects will be on cement machinery
Before we can answer what would be the effects of large future home price increases relative to rents, we would have to ask why those increases would be happening. Let us consider why they increased the last time, in the early 2000s. The reasons are basically the same in both the US and the UK.
What would happen if, as so many people are hoping, home prices were to go up dramatically again as they did in the early 2000s? Would such a change really benefit society?
People who most ardently desire this are homeowners who are underwater on their mortgages, who took out mortgages at the peak of the boom and now find that their homes are worth less than they owe on them. And besides, the relative industries will certainly benefit from the raising home price. The cement equipment and stone crusher manufacturers may be the biggest beneficiary.
Thinking that large home price increases would be a good thing seems very widespread. But the effects of any such future price boom would not be so clearly beneficial, and would depend on the causes of the price increase and the financial arrangements that were made for them. The issues are much more complex than most people seem to imagine.
Note that in the latest bubble home prices in the US and the UK rose rapidly relative to the cost of renting. It was not a rental boom. It was thus financial in origin, not caused by a rise in the real scarcity value of housing services that people want to consume. It was instead a change in the investment demand for ownership of a claim on a stable flow of rents.
We should also hope for some fundamental change in our mining machinery fields so that the problem that got us into this housing crisis will not be repeated. I talk about new types of construction cement equipment that would go a long way towards preventing the kind of financial crisis we have just been through. The construction of such cement mill equipment will be in effect lead a more progress in machinery technology and innovation.
Ultimately, what we really should be hoping for is not home price increases but democratisation and humanisation of the financial infrastructure. Such improvements are unambiguously good, and are things we can make happen. It need not be just a hope.