Increasing housing supply in popular cities leads to lower or stable house prices
Increasing housing supply in popular or growing cities helps lower or stabilize housing prices by accommodating demand shocks.
The claim is a specific, contestable, and empirical economic proposition about the relationship between housing supply and prices. The retrieved literature directly addresses this: paper [0] shows that less elastic (constrained) housing supply leads to larger price spikes from demand shocks, and paper [2] shows that residential land supply quantity has a negative effect on house prices. Therefore, the claim is supported by the provided empirical evidence.
Antonio Accetturo, Andrea R. Lamorgese, S. Mocetti, Dario Pellegrino. Housing supply elasticity and growth: evidence from Italian cities. 2020. https://doi.org/10.2139/ssrn.3612929
This study demonstrates that cities with more elastic housing supply experience smaller house price increases in response to demand shocks, illustrating the stabilizing role of supply expansion.
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Li C, Wang D, Liang W, Zhang F. How urban residential land transfer policies affect the housing market-evidence from Beijing, China.. 2025. https://doi.org/10.1371/journal.pone.0334886
This analysis of the Beijing housing market indicates that an increased quantity of residential land supply exerts a negative effect on house prices, helping keep them stable.
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