Kristian Niemietz looks at how housing costs in the UK have exploded in recent decades. Real-terms house prices in 2011 were more than two-and-a-half-times higher than in 1975, with rent levels following suit. In the USA, Germany and Switzerland, real-terms house prices are still close to their 1975 levels.
· Housing affordability measures show housing to be unaffordable in every single one of the 33 regions in the UK.
· The main difference between the UK and its north-western European neighbours is not in demographics, but in completion rates of new dwellings.
· Empirical evidence from around the world shows that planning restrictions are the key determinant of housing costs.
via Abundance of land, shortage of housing | Institute of Economic Affairs.
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Australia is next in line behind the UK:
“[UK] House prices have doubled in real terms since the mid-1990s alone, from an already very high level. No other developed country except Australia has experienced a price explosion of such a magnitude. Not even Spain, with its notorious house price bubble, has quite paralleled the British experience.”
and
“Even some highly sought-after North American markets such as Washington DC and Chicago are cheaper, relative to earnings levels, than any region in the UK. Only Australia shows a similar lack of inexpensive housing.”
both countries run by labour at the time?