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Debate House Prices
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Nominal vs Real House Price Cycles
Comments
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this is where i part agree with one of Hamish's points...!!!!!!_face wrote: »Nominal inflation needs to be nobbled, mind. And where is that wage inflation?!
you have a percentage of property transactions that needs to to turned over each month/year for there to be HPI. as long as there is enough wage inflation for those people that make these transactions i don't think we can avoid house prices increasing.
general wage inflation won't be happening... but as long as you have the above people (which will be about 30%-40% of people or even maybe slightly less especially with the low number of property transactions) getting pay rises in the short term that's where the HPI will be.
t'is going well - t'is not hard.!!!!!!_face wrote: »How is your fasting going?
this is only an internet forum, it's all a bit of a joke really. nothing serious - whoever takes it too seriously needs some sort of rehab...0 -
The usurers continue to squeeze, then...?this is where i part agree with one of Hamish's points...
you have a percentage of property transactions that needs to to turned over each month/year for there to be HPI. as long as there is enough wage inflation for those people that make these transactions i don't think we can avoid house prices increasing.
general wage inflation won't be happening... but as long as you have the above people (which will be about 30%-40% of people or even maybe slightly less especially with the low number of property transactions) getting pay rises in the short term that's where the HPI will be.
Oh, f'sure. I'm just here to get some writing practice in.t'is going well - t'is not hard.
this is only an internet forum, it's all a bit of a joke really. nothing serious - whoever takes it too seriously needs some sort of rehab...Long live the faces of t'wunty.0 -
I just flicked through the OBR report.
They don't do their own house price forecasts. They've taken a median of others.
"...we assume that house prices follow the median of independent forecasts over the next two years, before growing at a rate that is broadly in line with long-run average earnings growth."
i wonder what the source of these "independent forecasts" is?
and i wonder why they assume that, longer term, prices will track wages? i thought that link was 'old news'?FACT.0 -
then... a guy will run into the temple and throw all of the their tables and stalls upside down and tell everyone that this is the house of Hamish!!!!!!!!!_face wrote: »The usurers continue to squeeze, then...?
but seriously now... unless there is growth in the economy by then or the current 'housing boom' does really take place - there are going to be some real fundamental issues to resolve...0 -
In some ways you're stating the obvious here really Hamish. If RPI is positive (as it almost always is) nominal house price rises will always be greater than real house price rises, that's just maths.
It's worth noting that neutral base rates are usually considered to be RPI+2% typically. It may be that other factors will change what is neutral on occasion. If the BoE reckon that RPI of 1% is likely, then that would be consistent with base rates of 3%. My fear is that 1% could turn out to be an overestimate of inflation.
I think that the graph you print probably doesn't have enough data about crashes to support any hypothesis on what happens during crashes, neither to say that they 'always' stagnate or 'always' bounce back.
Wage growth tends to average RPI+2.5% - RPI+3%, a little lower when unemployment is high perhaps and a little lower when unemployment is low. I would imagine that reductions in public sector costs will keep wage inflation low as an average across the country as public sector workers have seen wage increases above the national average in recent years so holding down their pay would serve to push down average pay increases.0 -
HAMISH_MCTAVISH wrote: »So how exactly is it a "mini-crash" when house prices rise, the costs of everything else rise more, and wages don't keep up with either?
Fairly sure the chocolate bar to house price ratio doesn't count....;)
Well if house prices rise and everything else rises by more, your beloved blue graph in the OP will show a crash of sorts. Wages don't matter in that respect.0 -
Well if house prices rise and everything else rises by more, your beloved blue graph in the OP will show a crash of sorts. Wages don't matter in that respect.
Yes it would show a crash.
And yet in the real world, the "crash of sorts" will hurt no homeowners, help no FTB's, and house prices will still become more expensive relative to wages.
People who rely on that graph are deluding themselves. Just because the ratio of chocolate bars or bananas to houses changes doesn't mean they get cheaper.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
It does if make chocolate bars or own shares in companies which do I guess0
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sabretoothtigger wrote: »It does if make chocolate bars or own shares in companies which do I guess
If we all got paid in bananas, it would be different.
Although, that may explain why Macaque is always so convinced a crash is ongoing......:D“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Immensely entertaining that after several years of us banging on about the difference between nominal and real house prices, the bears only now seem to get it.
https://forums.moneysavingexpert.com/discussion/3049258
Never mind geneer, one day your trolling won't backfire to comedy effect.
One day...... “The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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