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Debate House Prices


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The true inflation rate is closer to 10 per cent than five, and may even be higher

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Comments

  • RDB
    RDB Posts: 872 Forumite
    Malcolm. wrote: »
    Which is another reason why house prices will not crash. Physical (long term appreciating) assets act as a hedge against future inflation. It woulld take a severe blow to disposable income and numbers in employment to see the crashes of the scale many on here predicted.

    The point is even if house prices are rising by 5% they are falling by 5% in real terms if inflation really is about 10%.

    They are actually falling or staying the same which means they are falling by 10% in real terms.

    It could well play out a silent crash where everything goes up with big inflation but house price stay the same so crash in reality.
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    RDB wrote: »
    The point is even if house prices are rising by 5% they are falling by 5% in real terms if inflation really is about 10%.

    They are actually falling or staying the same which means they are falling by 10% in real terms.

    It could well play out a silent crash where everything goes up with big inflation but house price stay the same so crash in reality.
    which means that those that can afford to buy will buy - those that can't buy will be even further away from affording to buy.

    the 'richer' people benefit more from real house price falls. that's what real house price falls do to the housing market.
  • bendix
    bendix Posts: 5,499 Forumite
    Maybe I'm unique, but most of the things I tend to buy are either as cheap or cheaper now than they were twelve months ago. I can't think of a single thing that is costing me more - food (well, that's seasonal, so I buy what is low cost at the moment). Clothes? I buy in the sales. Petrol? I dunno - I don't drive.

    What else is there?
  • Really2
    Really2 Posts: 12,397 Forumite
    10,000 Posts Combo Breaker
    bendix wrote: »
    What else is there?

    Alcohol....
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