HousePrices double every X no of years- so last X years went up 300% correction?

JonnyBravo

RDB wrote: »

Any proof that earnings go up 3% ABOVE inflation?

I have my doubts this can be right.

So what shopping our parents generation could buy with a months earnings say 50 years ago will be 150% less than we can buy?

3% a year above inflation this can no way be sustainable.

Eventually you could buy a weeks worth of food with 1 hours wage:rotfl:

If only crazygaijin was around. I bet he would know the answer. :rolleyes:

chucky

JonnyBravo wrote: »

If only crazygaijin was around. I bet he would know the answer. :rolleyes:

that alternate user ID is currently pregnant (again) or in Japan at the moment...

ukcarper

RDB wrote: »

Any proof that earnings go up 3% ABOVE inflation?

I have my doubts this can be right.

So what shopping our parents generation could buy with a months earnings say 50 years ago will be 150% less than we can buy?

3% a year above inflation this can no way be sustainable.

Eventually you could buy a weeks worth of food with 1 hours wage:rotfl:

A lot of things are a lot cheaper in real terms than 50 years ago and especially electrical goods my first washing machine in 1975 was £50 same thing now £200.
Wages have gone up at least 10x since then

CLAPTON

RDB wrote: »

Any proof that earnings go up 3% ABOVE inflation?

I have my doubts this can be right.

So what shopping our parents generation could buy with a months earnings say 50 years ago will be 150% less than we can buy?

3% a year above inflation this can no way be sustainable.

Eventually you could buy a weeks worth of food with 1 hours wage:rotfl:

2-3 % per annmum above inflation is the figure since about 1950 with a couple of exceptions.. 1973 (oil price shock ) and 1983 (recession) plus of course the current recession

I'm surprised you aren't aware of the general increase in wealth...

more people own property
and have:
central heating
cars
holidays
eat out
have mobile phones
internet access
clothes are virtually disposable now.. you can buy a suit for £25 in asda/tesco..ten years ago you would probably pay £100 or more


etc etc than ever before

and this is largely (except house prices) because these things are much cheaper than formally

So yes, 50 years ago the vast majority of people didn't have central heating, fitted carpets (or laminate), go to Uni , have foreign holidays, have a car, have fitted kitchens or nicely fitted bathrooms, eat out in restaurants etc etc... try talking to your parents or grandparents.

Graham_Devon

RDB wrote: »

Any proof that earnings go up 3% ABOVE inflation?

I have my doubts this can be right.

So what shopping our parents generation could buy with a months earnings say 50 years ago will be 150% less than we can buy?

3% a year above inflation this can no way be sustainable.

Eventually you could buy a weeks worth of food with 1 hours wage:rotfl:

I had my doubts too, but I already been wronged twice today and feel thats enough for one day

Would require 5-6% increases each year approximately.

dopester

HAMISH_MCTAVISH wrote: »

It is ultimately all about supply and demand.

Why do you expect houses to be any different? There is a chronic shortage of housing. We don't build enough for a growing population. And have not done, over the long term.

We can stop HPI, if we can build 250,000 houses a year, every year, for the next few decades, starting immediately.

Chances of that happening? Zero.

Why wasn't your average house price £170,000 back in 1965? Or average rent £800pm in 1965?

Because it's all to do with what the underlying economy can support / afford to pay at any point. That is true for the value of houses into the future.... even if insufficient number of homes are being built.

Limited or even chronic supply might give them an edge of maintaining a higher value than actually objectively worth, but not to the extent of protection you imagine (imo) from the price/value levels of today.

Pay-cuts, rising unemployment, very high personal and public debt levels, much tougher job prospects and opportunity for the young coming into the system ... a combination of deflationary factors. To suggest ever higher population and thus supply and demand protects house prices above and beyond what is happening in the real economy is not something I believe in.

Yoshua

If anything goes up above inflation on a consistant basis then there has to be a correction to bring it back in line with everything else that goes up the same as inflation.


Everything goes through waves and cycles from overvalued to undervalued.

At the moment house prices are way overvalued and the time will come again when they will be undervalued.

I think it will be within the next 3 years, but time will tell.

mbga9pgf

SilverStandard wrote: »

Im not making a statement more asking a question.

People often say house prices double every so many years. I say yes over the long term that is right, but they have been more than doubling this last boom.

How many years of falls to make the correction down to the mean long term average of only doubling every so many years?

With Wage inflation of 3% and neutral house prices, it would take 11 1/2 years tro return to the long run trend set from 1940-2000

chucky

Yoshua wrote: »

If anything goes up above inflation on a consistant basis then there has to be a correction to bring it back in line with everything else that goes up the same as inflation.

the correction according to inflation has come and gone old chap - it looks like it was in Q1 2009.

chucky wrote: »

according to the HPCers favourite graph - we were at the right level in Q1/Q2 2009.

SilverStandard

I agree that ALL asset classes do go from overvalued to undervalued. Its always happened throughout history and allways will

There is no way that UK property is undervalued at the moment.

There will come a time in the future when UK property will be undervalued again.

Surely no one will disagree with this, this forum is all about when it will happen.



Look at my sig, in 1980 1000 oz of silver could buy an average house in the UK.

At the moment gold and silver are still undervalued and house prices are still overvalued.

Bottom line is that silver and gold are in a bull market, a primary uptrend lasting another 5-10 years, so even if your timing is poor, the uptrend will bail out your mistake. For example, when the gold price first climbed to $340, I was all vexed about whether it would correct to $320 or $290. Today all that worry looks silly, because the primary uptrend has bailed out those $340 and $320 purchases long ago.