***Maybe buy a house**Prices to fluctuate over many years**

Woby_Tide

Maybe this is the happy medium topic, I think we've got all aspects covered

dougk_2

Dead right W_T.

Prices go up and down all the time! Seasonal trends, small dips and increases with different economic trends and if things go badly wrong crashes.

One point is though - prices ALWAYS increase in the end!

frugal_dougal_3

I couldn't have put it better myself !

deemy2004

dougk wrote:

Dead right W_T.

Prices go up and down all the time! Seasonal trends, small dips and increases with different economic trends and if things go badly wrong crashes.

One point is though - prices ALWAYS increase in the end!

Have to always price assets in realterms. Still UK housing sitll rises, but the return is not as good as equities or Government bonds over the longer term.

ducky2004

"not as good as bond..."

That sounds very familiar to the one I read in Nationwide house price report.

I agree it must always be priced in real term, inflation adjusted.

Please also note that house price asset is usually purchase with a mortgage and high geared -i.e. 10% deposit, 90% mortgage. It is true that bond/share return 11% annually but few of us would buy shares on 10% margin.

So, a 11% increase in share price gives a 11% return while a 2% increase house price gives 20% return. And the mortgage interest are usually offset by either rent or the fact that you are living there.