> I doubt that the cost of building the house is even the major cost factor - it's probably mostly property value for the lot.
This is certainly the case here in the UK - but I suspect it depends on your local laws.
I looked into building my own house and essentially when you found a plot of land where you could legally construct a house - if a high quality house in that location would be worth £400k and cost £150k to construct, then the landowner would want £250k.
I do sometimes wonder if it could be politically advantageous to separate out the business of physically constructing houses from the business of capital management, land investment, risk management and house price speculation.
If a council knew they could construct 20 families worth of good quality social housing for £100k per house, with no risk of cost over-runs or late delivery, and they just had to provide the land? That could give them the motivation to find the land.
I wouldn't discourage speculation on the price of the physical dwelling (i.e. the house). But land speculation is corrosive to society, and the way to fix that is with a land value tax.
> separate out the business of physically constructing houses from the business of capital management, land investment, risk management and house price speculation.
That is how it mostly works in the US. The developer buys a large plot of land and puts in roads, utilities then sells the lots to several home builders who build houses on it. The home builders contract out the foundation, framing, plumbing... to separate companies. while it is common to be in more than one part of this, only the smallest developments are all one builder (and even then plumbing is contracted out).
This is certainly the case here in the UK - but I suspect it depends on your local laws.
I looked into building my own house and essentially when you found a plot of land where you could legally construct a house - if a high quality house in that location would be worth £400k and cost £150k to construct, then the landowner would want £250k.
I do sometimes wonder if it could be politically advantageous to separate out the business of physically constructing houses from the business of capital management, land investment, risk management and house price speculation.
If a council knew they could construct 20 families worth of good quality social housing for £100k per house, with no risk of cost over-runs or late delivery, and they just had to provide the land? That could give them the motivation to find the land.