1Everyone in this crowded city seems to be asking the very same anxious question about housing.
2Why do house prices keep climbing higher when the government keeps promising firm action every year?
3The honest answer, unfortunately, begins with the oldest and simplest rule in all of economics.
4When demand grows steadily faster than supply over time, prices have only one direction to go.
5Our urban population has grown by more than a fifth in only the last ten years.
6Meanwhile, private builders have completed far fewer new homes than the country actually needed each year.
7Strict planning rules together with endless paperwork make new construction painfully slow and very expensive.
8Cheap bank loans over the past decade have poured even more fuel onto the fire.
9Wealthy investors eagerly bought second and even third homes, always hoping that prices would never fall.
10Sharply raising interest rates has cooled buyer demand only slightly during the course of this past year.
11Yet real relief for ordinary young buyers will only come from building many more affordable houses.
12Until the supply of homes finally catches up with demand, young families will keep struggling to buy.