OK Fester, let me remind you of the context.

I offered:

"If people cannot afford to buy houses, the price will fall. Agreed?"

You responded:

"Certainly not. Bangladesh has $1 a day wages and some of the highest land values in the world"

So far, you have supported this with reference to a statistic that "the most expensive residential land in Bangladesh in 1998 sold in a range from 500 AUD to 1500 AUD per square metre"

I presume that you are suggesting that those who live on $1 a day are disadvantaged somehow by the fact that prime Dhaka CBD real estate is commanding these prices. Since these folk are among the 80% who live in rural areas, the connection might be a little tenuous. Certainly, land values where this 80% live cannot be described as "among the highest land values in the world"

So in order to make your point, you have conflated the concept of the existence of 100 million of rural poor, with the concept that land values in the centre of Dhaka are high.

Does not compute. Furthermore, it bears absolutely no relation to the point that I made, that the laws of supply and demand govern property prices just as firmly as they do everything else.

"If people cannot afford to buy houses, the price will fall. Agreed?"

Let me elaborate, Pericles. Let's say that you have 50 people each with a maximum of 200k to spend, and one house available for 500k. Does the price fall to 200k? I dont think so.

Your comments on land being cheaper for the rural poor also need to be put into perspective. 15k per acre I believe you said. Not much for an Aussie, but a Bangladeshi on a minimum wage gets 15 USD per month. So an acre of land 30km from the cbd would cost 1000 months or 83 years of wages. Lets now equate this to an Aussie on $5 an hour. Working 100 hour weeks he would earn 2k per month. So that would make an acre of land 30km from the cbd equate to $2 million.

>the laws of supply and demand govern property prices just as firmly as they do everything else<

Exactly Pericles. So let's put a stop to these blind men and the elephant farces and instead discuss the real causes.

>you can buy an acre of land within 30km of the CBD for US$15,000<

Thanks for reminding me not to take things on faith Pericles. The figure per acre amounts to nearly 34k in 1998 AUDs. So that would make the Aussie acre equivalent about 4.5 million AUD.

>>The figure per acre amounts to nearly 34k in 1998 AUDs. So that would make the Aussie acre equivalent about 4.5 million AUD.<<

¿Qué?

Interesting example

>>Let's say that you have 50 people each with a maximum of 200k to spend, and one house available for 500k. Does the price fall to 200k? I dont think so.<<

Well of course it won't. The price will actually settle at a point where a) the maximum number of people may be accommodated in the single dwelling and b) those people equate the amenity they will be receiving - given the number involved - with the expenditure.

So, if the house is really big, you might find all 50 willing to put in all $200k each, simply to have a corner of a house to themselves, in which case the builder will be able to charge $10m for it. Or if it is really small, you might find only ten of them willing to make the commitment, in which case the price will rise to a mere $2m.

Now, if you were instead to build 50 houses...

Are you getting the picture?

And all that nonsense about wage equivalence has absolutely nothing to do with the price of land, by the way. You can only buy land with money, whether you are an Australian on $100,000 a year or a Bangladeshi on $250 a year.

The only way your original statement "some of the highest land values in the world" can be remotely true is if you were to add "compared to the average wage". Which then requires a whole lot more statistics which neither you nor I have.

One more point.

You will also find that the average wage is heavily weighted to rural areas, where 80% of the population live. Why would they want to buy within 30km of the CBD anyway? The cost of rural land is, if you read the report, sufficiently low as to have no impact at all on the price of a home. One of the finance projects, I notice, is in fact building rural homes for between Tk.25,000 and Tk.85,000.

Here are the first, of many, articles explaining the challenges faced by a country with a declining population.

http://www.economist.co.uk/opinion/displaystory.cfm?story_id=9545933

http://www.economist.co.uk/world/displaystory.cfm?story_id=9539825

Now that is a barbecue-stopper.