This post originally appeared on Orphan Road.
I’ve made it my personal conquest in local blogs and newspaper comments to argue against those that say new dense housing drives up prices. Simple supply v. demand economics tells us that when you have more of a good or service without new demand the price goes down. Why this tricks people is because they see new condos selling for more than the old houses they replaced, without perceiving the high demand that caused those condos to be built or seeing that the average price of housing overall goes down – say, old condos in a less desirable area that now have fewer potential buyers.
How can I ever get through to the deniers? Those that say that the cost of new housing will always be high whatever the demand? Well, a down economy helps. The Slog is reporting that Brix and Gallery condos are being auctioned off at bargain basement rates – $458k units are starting at $185k. Yes, I’m sure they’ll sell for more than that, but imagine what older condos will start selling for once their potential buyers all buy new condos.
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