I’m confused. Rising rents is a symptom of an economic rebound, isn’t it? It shows that more money is flowing there and the people living there are wealthier.
The dark side is that it’s different people because they pushed out the poor ones. That is a different story than “threatens economic rebound” though.
Not without matching rises in incomes.
Housing is a necessity, and the economy suffers if people can’t afford it. If you are poor and priced out of the city, you get less access to resources such as education and career opportunities, the key drivers of growth.
Even if a government decides to rely on the growth brought by attracting wealthy individuals, they still need to hire a labour force, which can’t exist if they don’t have anywhere to live. Can’t rebound to pre crisis levels of tourism if the tour guide can’t afford to live in the city.
Also, as a matter of pedantry, higher rents make the landlords wealthier. Typically with high rents we start to see more high income, yet asset poor households who are unable to save and become wealthy.
Why should rising rent be a symptom of the economy? It’s just the owner of your flat trying to extract as much money as he can.
Why didn’t the owner raise the price a year ago? Something improved such that now someone is willing to pay the higher price.
Why didn’t the owner raise the price even higher? Because nobody would have rented then. Some kind of negotiation happened.
From the article:
lawyers representing the apartment’s Chinese owners said they planned to raise the rent, which was already 700 euros - nearly Syntihaki’s entire earnings.
Great negotiation between everybody! The free market at work!
They were raised a year ago too? Thai article is about a period of 5 years.
