Thursday, 4 January 2018

Land Fans' Plans Withstand

Housing has kept pace with equities over the long term.

Why not?

Given its ability to be rapidly repurposed, why has land not consistently thrashed shares?

Schularick et al 2014 (linked) posits that advances in private transportation (i.e. cars) enabled the expansion of cities into areas where land supply was plentiful, keeping prices down during modernisation's early days.

Those gains have now settled, so future total returns on land may beat those from stocks
... barring the uptake of other technologies that diminish the impact of distance from city centres.
... Like, oh I dunno, telepresence, remote work, and automated transport.

No more from me. I've raised one point the fine article didn't cover. Go read it.

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