TCD Conference on house prices affect on birth rates

Trinity is running a conference looking at how rising house prices reduce birth rates (or to put it another way, how the short sighted grab for immediate profits and massive price growth within a property market can ultimately lead to long term that market destroying itself).

This from Professor Herman Schwartz from University of Virginia;


Blue Horseshoe

Good post

It shows the stupidity of ‘asset price’ inflation - Greenspans / Bernanke / Yellen’s mantra

What is the point in my house being worth 6m, when I will need to get out of it even earlier and retire to an appartment so that my kids can sell it and use it as a down payment to fund their own houses (the famous ‘ladder’). It is a zero sum game and ‘fools wealth’. If I spend it on cars, holidays etc. I am only impoverishing my kids.

Someone watched “the coming collapse of the middle class” and made a lecture out of it.

Correlation not equaling causality again.


We live with a corrupt and restrictive planning system that sets the parameters for what, where and how we can build combined with an interest rate policy that bears no relation to availability of resources to support construction activity combined with fractional reserve banking and deliberate government economic policy to promote asset inflation, who then can be surprised at the chaos that results as all these factors combine to drive up the price per square foot?

You want to build a new house/estate or apartment then you have to sort through all this…all these costs add up.

  1. Finance.
  2. Location of site and survey.
  3. Services to that site - Heating, water, electricity, sewage, waste disposal, internet/telecommunication.
  4. Building design - architects and consulting engineers.
  5. Planning permission - specifications, re-designs, appeals, site inspections and fees.
  6. Construction - Tender for work, time taken to deliver. For a developer there is marketing, cost of sale to consider, cost of employing resources (finance, material and men) to do this which must be committed up front.
  7. Furnishings.
  8. Maintenance - stamp duty, management companies, property tax, other service charges.
  9. Children.
  10. Transport.

Fact is you cannot build the same specification house that your parents did a generation ago and upgrade it as you go. A modern building requires that you commit the full cost up front. An additional problem during the boom is the easy credit and restrictive planning permission on one hand drove up the price of land where people wanted to live and on the other bought flood plains into service in other parts as the price of land was cheaper there. An additional symptom of price inflation is that size and quality are cut, as the developers were restricted in site availability and building height they had to find ways to squeeze more apartments into the available space to earn a profit. The availability of cheap and easy credit also drove the behaviour of the specuvestor who went head to head with the first time buyer and drove the demand for the investobox (i.e. a geared inflation vehicle build for tax relief).

House prices are not the only factor to consider that affect birth rates which in Ireland have been falling steadily since the 1940s, the flip side of the improvement in education for women also means they must provide a return on that investment in the workplace, consider what happened in Eastern Europe under socialism - why did the birth rate fall there? It was not high house prices or lack of crèche facilities in the Soviet Union.

If there is a link between high house prices and the birth rate how do you account for the data in Ireland?

I wondered if the data in Ireland is driven by two groups, one who are affected by house prices and those who aren’t and consequently are unaffected.