The real estate market. In many countries, the value of labor and materials necessary to build a house is about 30 to 40 40 to 120 thousand euros. Everything else is speculation.
Location matters though. It wouldn’t make sense for a house to cost as much as it does to make. Though obviously prices have become completely detached from reality.
Value is how much socially necessary labor it actually took to build and maintain that house: materials, construction work, infrastructure, etc. It’s the real human effort crystallized in the building.
Price is what they slap on it in the market, which can be wildly disconnected from its actual value. In housing, price gets inflated by speculation, land monopolies, credit bubbles, location hype, and landlord parasites treating homes as investment vehicles to extract rent.
So you might have a crumbling flat that cost relatively little labor to build 40 years ago, but because it’s in a “desirable area” with a housing shortage artificially maintained by capital, its price skyrockets. That is a socially enforced ransom, not the value.
I’m assuming labour cost is still pretty low in Southern Italy, because in North/Western Europe you can have a kitchen and a bathroom renovated for that money, but no way build an entire house.
I am just talking about the cost to build the actual house plus the profit the contractor slaps on top. The price of your house will not be below 1 million in most places because of the reasons you stated
It’s not only speculation, it’s also because some locations are a lot more wanted by many people to live there: right next to a big park, walkable neighbourhood, city amenities nearby but few city problems, no highway audible when sleeping with open window et cetera et cetera. More people want to live in prime locations than prime location housing is available.
The big scam are the insane prices for run down shoebox-apartments in shitty locations.
The real estate market. In many countries, the value of labor and materials necessary to build a house is about
30 to 4040 to 120 thousand euros. Everything else is speculation.Edit. Initially I put 30 to 40 thousand euros.
Location matters though. It wouldn’t make sense for a house to cost as much as it does to make. Though obviously prices have become completely detached from reality.
Where the fuck do you live? In switzerland your average new house costs around 300-400k
Value is how much socially necessary labor it actually took to build and maintain that house: materials, construction work, infrastructure, etc. It’s the real human effort crystallized in the building.
Price is what they slap on it in the market, which can be wildly disconnected from its actual value. In housing, price gets inflated by speculation, land monopolies, credit bubbles, location hype, and landlord parasites treating homes as investment vehicles to extract rent.
So you might have a crumbling flat that cost relatively little labor to build 40 years ago, but because it’s in a “desirable area” with a housing shortage artificially maintained by capital, its price skyrockets. That is a socially enforced ransom, not the value.
https://open.oregonstate.education/sociologicaltheory/chapter/value-price-and-profit/
How did you arrive at the 30 to 40 thousand euro figure
From a friend of mine who built a house in Southern Italy some years ago.
You can also find numbers on the Internet, see basic construction cost in Bulgaria here: https://arch-pfoertner.com/en/blog/bulgaria-vs-spain-building-costs
I’m assuming labour cost is still pretty low in Southern Italy, because in North/Western Europe you can have a kitchen and a bathroom renovated for that money, but no way build an entire house.
Just a bathroom for $40k in Australia.
I am just talking about the cost to build the actual house plus the profit the contractor slaps on top. The price of your house will not be below 1 million in most places because of the reasons you stated
Not in ZH it’s not
It’s not only speculation, it’s also because some locations are a lot more wanted by many people to live there: right next to a big park, walkable neighbourhood, city amenities nearby but few city problems, no highway audible when sleeping with open window et cetera et cetera. More people want to live in prime locations than prime location housing is available.
The big scam are the insane prices for run down shoebox-apartments in shitty locations.