That's not how market pricing works for things like property since the supply is basically fixed. Changing the available supply by even 5% can easily cause the price to change massively.
Let's say there are 100 homes in an area and normally 95 of them are lived in and 5 are up for sale. Anyone wanting to move to the area has 5 homes to choose from, so competition will force the price down to some level acceptable to the sellers. Now let's say that instead of 5 homes for sale, 4 of the owners decide to keep them for Airbnb rentals instead of selling. Now there's only 1 home on the market so if you want to move there you have to pay whatever the owner is charging or else wait an indefinite period of time until another home opens up. So the price will rise to the highest level a would-be resident is willing to pay, even though we only changed the availability numbers by 4%. In effect, property pricing (including apartment rentals) is determined "at the edges" so to speak.
No comments yet.
