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6 votes
Accepted

If house prices appreciate, why do developers sell them?

They are different businesses. Developers make more money developing than landlording. Some do both. But they are different businesses entirely. Also, there is a limited supply of capital and ...
FreeMarketUnicorn's user avatar
5 votes
Accepted

Why does optimal allocation call for unlimited distribution of information?

Suppose you have a product that you can distribute for constant marginal cost $c$. For every $v\geq0$ assume there are some consumers who value the good at $v$. The net welfare created when someone ...
Ubiquitous's user avatar
4 votes

If house prices appreciate, why do developers sell them?

Why not hold onto the property, and sell it later at a higher price? Here is a non-exhaustive list of why not: Real estate bubbles going burst. Depreciation and maintenance costs. A location may ...
Iñaki Viggers's user avatar
4 votes

If house prices appreciate, why do developers sell them?

The simple answer is that if it is widely expected that the value of an asset will increase in the future, then the value should rise today as people bid up the price of the asset by trying to get the ...
Ege Erdil's user avatar
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4 votes

What would happen if a company bought back of all of its stock? Would it own 100% of itself?

The New York Stock Exchange has a continued listing requirement of 300 shareholders and 200,000 shares. A company will want to consider whether continuing to be traded on a stock exchange is desirable ...
H2ONaCl's user avatar
  • 941
3 votes

Does neoclassical economics explain or assume private property rights?

It is true that mainstream economics (which includes neoclasicall economics) is empirical but note that any explanation can only arise from theory (whether theory is explicitly formulated or only ...
1muflon1's user avatar
  • 56.9k
2 votes

What would happen if a company bought back of all of its stock? Would it own 100% of itself?

Companies can issue new stock (pending board — and regulatory — approval) in “public offerings” and stock buybacks are basically the opposite of this. Typically a company will do this in ...
Bill Clark's user avatar
1 vote

Is there any evidence for tragedy of the commons or is it all actually the tragedy of private ownership?

Wild animals in a forest are actually valid example of common ownership as their ownership is shared by all members of society. Harding who popularized the concept of tragedy of commons explicitly ...
csilvia's user avatar
  • 2,734
1 vote

What would happen to the housing market if investors could only have one extra house?

Depending on how poorly the law is worded, investors would just aggregate into a company and own as many they want (either companies will have no limits, or the limit will be based on the number of &...
uberhaxed's user avatar
  • 229
1 vote
Accepted

Is there any economical rational for a government to maintain low property taxes and rather high work-related taxes?

It depends on the parameters of the Romanian economy. There are no publicly available estimates of relevant parameters for the Romanian economy, but using some reasonable assumptions answer would be ...
1muflon1's user avatar
  • 56.9k
1 vote

If house prices appreciate, why do developers sell them?

People buy houses because they want to live in them, and hope the real market price will appreciate. People who buy (or buy shares in) investment properties do so with the expectation to earn a rental ...
nathanwww's user avatar
  • 626
1 vote

How is it economically responsible to destroy proprty which has value?

The general answer would be that it is wasteful and selfish to destroy assets with value. I'm referring to assets as something you own, as property can be confused with land or real estate properties. ...
JoaoBotelho's user avatar
  • 2,155
1 vote
Accepted

Episodes of Housing Crashes and Never Recovering

Maybe the case of Germany before and after WWI could provide you an example. See here. The short story is that there was a big housing shortage before the WWI, which, after the war, which was no ...
luchonacho's user avatar
  • 8,591

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