"Why I hate high house prices"

carolt

NB This is a quote; the opinions contained therein, let alone the title, are not my own work, before anyone asks:

http://www.lovemoney.com/news/the-property-ladder/why-i-hate-high-house-prices-3884.aspx?source=1000405

1.) Bad for businesses

2.) Bad for first-time buyers

3.) Bad for labour mobility

4.) Bad for rural, coastal and tourist areas

5.) Bad for saving (but good for borrowing)

6.) Bad for a large slice of society

7.) Inflation is always bad for your wealth


Discuss.

purch

High in comparison to what ??

carolt

Dunno.

That's for you to discuss.

purch

I never discuss House Prices, so you'll have to count me out.

inspector_monkfish

purch wrote: »

High in comparison to what ??

Silver ???

Really2

carolt wrote: »

NB This is a quote; the opinions contained therein, let alone the title, are not my own work, before anyone asks:

http://www.lovemoney.com/news/the-property-ladder/why-i-hate-high-house-prices-3884.aspx?source=1000405

1.) Bad for businesses

2.) Bad for first-time buyers

3.) Bad for labour mobility

4.) Bad for rural, coastal and tourist areas

5.) Bad for saving (but good for borrowing)

6.) Bad for a large slice of society

7.) Inflation is always bad for your wealth


Discuss.

TBH most of them are causes of HPI also.

1) financial boom = HPI
2) Give that one
3) House prices will always be higher nearer higher paid jobs. The wealth around the area causes HPI
4) Nice areas or retirement areas will always be higher (not good but unavidable) Because the small size of these villages and the wealth of the people moving there, nothing that can be done to avoid that.
5) Saving rates had a good return in the boom.
6) Read that point but it is poorley written. The remaining 30% of the population would like to own. They may do but they may also be unemployed or retired also.
7) Inflation is better for wealth than deflation. IF we had 300 years of deflation we would all be living in worse conditions than our forefathers.

purch

Silver ???

Yeah.....but for how much longer :rolleyes:

HAMISH_MCTAVISH

1.) Bad for businesses

Untrue... Good for businesses. Up to 8% of consumer spending was from MEW, and a booming housing market creates tremendous need for all sorts of household furnishings, appliances, consumables, etc.

2.) Bad for first-time buyers

Untrue.... The biggest barrier to entry into the housing market is not the house price, it is the deposit size. Far more potential FTB's could have bought a house in 2007 than can today, due to the excessive size of deposit that the crash has caused.

3.) Bad for labour mobility

True. But good for Labour stability. Businesses can also benefit from having a stable workforce tied to a local area. Investments in training and people development can be rewarded, rather than having someone jump ship and move elsewhere.

4.) Bad for rural, coastal and tourist areas

True. Local people can be priced out due to high second home ownership and retiree's. But that same influx of wealthy people also creates jobs through spending in local businesses, and has decreased unemployment in areas that used to be, quite frankly, dire for local young peoples prospects.

5.) Bad for saving (but good for borrowing)

True, but thats swings and roundabouts, and it's good for net wealth growth if you own property.

6.) Bad for a large slice of society

True, but good for a larger slice of society. HPI benefits more people than it hurts.

7.) Inflation is always bad for your wealth

Untrue. Inflation is only bad for your wealth if you haven't invested in an inflation proof asset, like housing.

inspector_monkfish

purch wrote: »

Yeah.....but for how much longer :rolleyes:

ooh, at least a hundred years...

Pobby

Hamish, are you suggesting Mewing is a good thing? Conjuring money from this air on an asset that has been depreciating from 2007? Grounds for divorce in my book.

Ah I remember the old days. In came your wages. Out went the bills and the bit that hopefully is left over is disposable income for you to spend,save or invest as you wish.

HAMISH_MCTAVISH

Pobby wrote: »

Hamish, are you suggesting Mewing is a good thing? Conjuring money from this air on an asset that has been depreciating from 2007? Grounds for divorce in my book.

Ah I remember the old days. In came your wages. Out went the bills and the bit that hopefully is left over is disposable income for you to spend,save or invest as you wish.

On a personal responsibility level, no, I don't think it is. I would never do it. But it can certainly be argued that for the wider economy it has it's benefits.

Don't forget there are many types of equity withdrawal too, it doesn't have to be through re-mortgaging.

People can downsize, and keep/invest/spend the difference.

People can sell and move house, and perhaps keep a bit of their profits, particularly if they are moving to a similar house in a cheaper area, etc.

Not all MEW (or HEW to be more accurate) is chavs buying BMW's, despite the portrayal of such by some on here.

As often as not it may just be Grandad moving into a smaller house and enjoying life with the difference.....