Quantity of supply changes house prices. No, really

An interesting little finding here:

As house prices around Britain are being desperately cut to lure buyers, homeowners in national parks are in an enviable position.

Houses in these pockets of beautiful British landscapes were £66,500 more expensive than counterparts elsewhere in the same county, according to research by Nationwide.

It’s pretty much impossible to build new housing in a national park. Therefore - pretty much - no new housing has been built in national parks for decades now.

Things that are in shorter supply are more expensive than things in greater, are they? That’s the sort of thing we could build a whole theory upon, even a science!

It’s also a nice illustration of the basics of theory and science to those who insist that just building more housing won’t reduce the prices of houses. Sure it will - what goes up also goes down, right?

Tim Worstall