So, if the assets get cheaper and cheaper to make, given that they can be made anywhere in the world, then the assets that comprise the house get cheaper.
And given that the house can be moved anywhere, it can be moved wherever land is cheapest, does the land underneath the house still appreciate in value?
Wherever there is location demand the price of land will be bid up and will take all the profits and gains due to say cheaper building costs that have been created elsewhere in the productive economy.
The value of the land where the assets are made or someone chooses to put a house will appreciate in value, it has always been thus.
Wherever there is location demand the price of land will be bid up and will take all the profits and gains due to say cheaper building costs that have been created elsewhere in the productive economy.
The value of the land where the assets are made or someone chooses to put a house will appreciate in value, it has always been thus.
If only you could hear yourself.
Speak when you are angry and you will make the best speech you will ever regret. Ambrose Bierce
So, if the assets get cheaper and cheaper to make, given that they can be made anywhere in the world, then the assets that comprise the house get cheaper.
And given that the house can be moved anywhere, it can be moved wherever land is cheapest, does the land underneath the house still appreciate in value?
Of course it does when poor precious little dumbf***s like Chris find it totally inconceivable that their life circumstances could ever dictate that they just might be wise ta contemplate ever living anywhere other than pretty much in tha guts of Melvegas.
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
So, if the assets get cheaper and cheaper to make, given that they can be made anywhere in the world, then the assets that comprise the house get cheaper.
And given that the house can be moved anywhere, it can be moved wherever land is cheapest, does the land underneath the house still appreciate in value?
The other big issue with what you are trying to suggest is local regulations. You just can't build a house like in the past. They have to meet so many local specific requirements that churning them out in a factory won't be as beneficial as you suggest. Also a significant amount of work (cost) to build a house is site preparation. You can't do that in a factory.
Also, when building (as people in Australia) are richer than in the past they demand more 'features' in a house. This is partly a result of greater wealth now but also what you are suggesting, as construction costs are relatively cheaper than site costs you may as well add an extra bedroom, media room, 3 bathrooms at build time as the incremental cost isn't that much more.
Transportation is also an additional cost you are adding.
What you are kind of suggesting is living on a house boat but that has its own complications and drawbacks, ie factory made house with no fixed abode. There is quite a community that live on canal boats, more or less, permanently moored in London. There is even a couple of people that live on yachts in the harbour in Sydney near my house, I see them most mornings when I walk my dog. But this is really only a solution for a small number of people.
There are plenty of places in Australia that you can buy a house for far less than replacement value. This would seem a better solution than buying a premade portable house for cost plus a margin plus transportation plus fitting to site plus the site.
Whether a house site increases in value (attracts the 'profit' or increase in wealth of the citizenry) will depend on the population growth of that location and wealth increase of locals. Construction costs of the house to go on it are almost immaterial.
Of course it does when poor precious little dumbf***s like Chris find it totally inconceivable that their life circumstances could ever dictate that they just might be wise ta contemplate ever living anywhere other than pretty much in tha guts of Melvegas.
Generally that won't matter. Any advantage or arbitrage will be seized on by the ambitious. It doesn't have to be a large change to switch a market in another direction. Once capital starts flowing in a different direction, it slowly builds momentum. This is known as an adoption curve, a well known mechanism of markets (which I thought you were a self styled expert in?).
Once the early adopters have seized upon a sizeable advantage, the early majority will surely follow.
Bardon
21 Jan 2017, 12:07 PM
I juts happen to live in the here and now that's all.
The future will be quite a surprise for you then.
A Lurker
Good post! Worth responding to.
A Lurker
The other big issue with what you are trying to suggest is local regulations.You just can't build a house like in the past. They have to meet so many local specific requirements that churning them out in a factory won't be as beneficial as you suggest.
That's only an issue if the monopoly persists. Governments are able to get away with stupid regulations because of lack of choice. When choice improves, the power shifts back to the "people", and you will find lots of stupid regulations falling by the wayside as governments compete to attract ratepayers.
A Lurker
Also a significant amount of work (cost) to build a house is site preparation. You can't do that in a factory.
A significant cost in Australia, but not everywhere in the world. For prefabricated buildings, site preparation consists primarily of clearing and digging holes. You don't need a slab on ground as you can put the floating floor on columns. Another significant cost is trench digging and pipe laying which becomes redundant when the house produces it's own power and processes it's own liquid waste. The house can also collect and treat it's own potable water in all but the most arid of locations.
A Lurker
Also, when building (as people in Australia) are richer than in the past they demand more 'features' in a house. This is partly a result of greater wealth now but also what you are suggesting, as construction costs are relatively cheaper than site costs you may as well add an extra bedroom, media room, 3 bathrooms at build time as the incremental cost isn't that much more.
Adding extras and design changes are actually cheaper when done in a factory than onsite. In a factory there may be a small setup cost to change dimensions, but on site everything is measured and cut to length, a significant labour cost, particularly if you consider the factory is in China, but the builders are in Australia, earning 10 times as much and working 1/3 as hard.
A Lurker
Transportation is also an additional cost you are adding.
True, but pre-fab is designed to fit into shipping containers, so it is likely cheaper to transport the whole house than to pay 10 dumbf***s to drive to Bunnings for materials while it takes 6 months to build the house. A pre-fab house can go up in as little as 1 day. 4 days is common.
A Lurker
What you are kind of suggesting is living on a house boat but that has its own complications and drawbacks, ie factory made house with no fixed abode. There is quite a community that live on canal boats, more or less, permanently moored in London. There is even a couple of people that live on yachts in the harbour in Sydney near my house, I see them most mornings when I walk my dog. But this is really only a solution for a small number of people.
No, I am not suggesting that at all. This is what I am suggesting: A pre-fabricated house that can be transported in 3/4 40ft shipping containers that produces all of it's own power, processes it's own liquid waste, collects and treats it's own water, with a floating floor sitting on columns sunk into the site, which can be erected and functional in 4 days.
A Lurker
There are plenty of places in Australia that you can buy a house for far less than replacement value.
Sure, but I want the house above, so I can choose the location and move the house there.
A Lurker
This would seem a better solution than buying a premade portable house for cost plus a margin plus transportation plus fitting to site plus the site.
Only if you like living like a third world peasant. Australian houses are barely developing world standard in the city. In the country they are 19th century.
A Lurker
Whether a house site increases in value (attracts the 'profit' or increase in wealth of the citizenry) will depend on the population growth of that location and wealth increase of locals. Construction costs of the house to go on it are almost immaterial.
No, you are still missing the point. If you have a movable house that can be erected in 4 days, then there will be no population pressure on land. There is no shortage of land, there is simply monopoly control of land. Once people are mobile, you break that monopoly, and then governments have to compete for rate paying citizens rather than gouge them.
When do you expect this change of land ownership system and location value to change?
It has already started, and will continue for another 20 years.
No wait, 11th of June, 2019 at 11:37AM.
Quote:
People are mobile, desirable land isn't, that's why land in Point Piper fetches the price that it does.
Desirable land is mobile, because desire is mobile. Point Piper is an unremarkable sandstone peninsula in an unremarkable harbour in a third rate city full of uncultured and ignorant people. It's desirability is not intrinsic, but transient. A historical accident.
When birds are in mating season, male birds will defend their territory, to the death if necessary. Once mating season is over, they move on. Only humans ascribe value to some piece of land because they once had a f*** there.
Speak when you are angry and you will make the best speech you will ever regret. Ambrose Bierce
That's only an issue if the monopoly persists. Governments are able to get away with stupid regulations because of lack of choice. When choice improves, the power shifts back to the "people", and you will find lots of stupid regulations falling by the wayside as governments compete to attract ratepayers.
A significant cost in Australia, but not everywhere in the world. For prefabricated buildings, site preparation consists primarily of clearing and digging holes. You don't need a slab on ground as you can put the floating floor on columns. Another significant cost is trench digging and pipe laying which becomes redundant when the house produces it's own power and processes it's own liquid waste. The house can also collect and treat it's own potable water in all but the most arid of locations.
Adding extras and design changes are actually cheaper when done in a factory than onsite. In a factory there may be a small setup cost to change dimensions, but on site everything is measured and cut to length, a significant labour cost, particularly if you consider the factory is in China, but the builders are in Australia, earning 10 times as much and working 1/3 as hard.
True, but pre-fab is designed to fit into shipping containers, so it is likely cheaper to transport the whole house than to pay 10 dumbf***s to drive to Bunnings for materials while it takes 6 months to build the house. A pre-fab house can go up in as little as 1 day. 4 days is common.
No, I am not suggesting that at all. This is what I am suggesting: A pre-fabricated house that can be transported in 3/4 40ft shipping containers that produces all of it's own power, processes it's own liquid waste, collects and treats it's own water, with a floating floor sitting on columns sunk into the site, which can be erected and functional in 4 days.
Sure, but I want the house above, so I can choose the location and move the house there.
Only if you like living like a third world peasant. Australian houses are barely developing world standard in the city. In the country they are 19th century.
No, you are still missing the point. If you have a movable house that can be erected in 4 days, then there will be no population pressure on land. There is no shortage of land, there is simply monopoly control of land. Once people are mobile, you break that monopoly, and then governments have to compete for rate paying citizens rather than gouge them.
I actually don't think we have a house construction issue in Australia. All types of buildings are available; relocatable, bespoke architectural, project etc. Technology to make buildings better and cheaper won't solve location desirability issues as Barton points out.
I know a number of people who have left Sydney and set up businesses or provide consultancy services from affordable beach or hinterland locations. They fly-in-fly-out for meetings and do most of what they do on the computer and phone. House construction type doesn't matter to make this a viable alternative. It's not commoditising buildings that will drive any acceleration of this 'way of life'. However, in my experience (partially as a business owner in Sydney) while people dream of escaping the city employees and employers actually like the social aspect of attending a work place and the ones that have built the personal and business connections to build a successful business (entrepreneurs) (and therefore employ others in these remote locations) are less likely to be the ones to actually leave the cities (even if they do talk about the desire to do so). As described above, it does happen but it is uncommon and I haven't seen much evidence of an accelerating trend.
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