What is driving such high property prices in main urban centres

Context: here in Lisbon and seeing building everywhere, clear a big boom going on but what stage is it at, and is permanent or will there be a bust?

Hypothesis: City centre prices will equalise around the world (or have already)

Drives

• Price of travel is going down leading to ability to travel more easily anywhere esp for urban elites
• Digitisation means more work from anywhere
• World wealth - people in world middle-class who want to buy property both to live in and as a store of wealth (how many)
• Proportion of people speaking english

What is the trajectory of house prices in major cities over the last fifty years.

House prices in central london since 1945?

What is a model of housing suppy and demand?

• How many people will want housing, where and when
• How much housing is there

Will house prices continue to rise faster than other assets and if so why?

Arbitrage arguments should imply that house prices are no better in expectations terms than any other asset.

Yet historical evidence on assets generally show this is not necessarily true (the risk premium puzzle etc). Some of that may be artefact of data collection and/or failing to account for duration etc.

Levelling asides

Leading on from economic globalization drivers above we could ask about the impact of greater fluidity in location. E.g. will it lead to:

• More networks / alliances - …
• Increasing friction - more and more people of different types interacting