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Debate House Prices
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Wealth effect of rising house prices boosting US economy
Turnbull2000
Posts: 1,807 Forumite
http://ftalphaville.ft.com/2013/03/05/1409222/the-wealth-declining-effect/
That UK house prices look set for a strong recovery* should be cause for optimism within the Treasury and Threadneedle Street. Reckon we could see a number of measures in the budget to stimulate housing demand whilst allowing constrained supply to continue.
*London apart of course, which long ago surged strongly ahead.
The Fed made it clear a couple of years ago that rising house prices are a policy target in order to stimulate consumer confidence and spending.The recovery of household wealth, if it continues, is a countervailing force against the decline in disposable income resulting from the payroll tax cut expiry and the parts of ongoing government austerity measures (including parts the sequestration cuts) that will directly influence consumer spending. So, obviously, the higher the effect the better.
That UK house prices look set for a strong recovery* should be cause for optimism within the Treasury and Threadneedle Street. Reckon we could see a number of measures in the budget to stimulate housing demand whilst allowing constrained supply to continue.
*London apart of course, which long ago surged strongly ahead.
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Comments
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Absolutely obvious.
If the US can keep their asset prices rising, consumer confidence will increase and it will eventually create a virtuous cycle of self re-enforcing economic growth.“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 -
The recovery of household wealth, if it continues, is a countervailing force against the decline in disposable income resulting from the payroll tax cut expiry and the parts of ongoing government austerity measures (including parts the sequestration cuts) that will directly influence consumer spending.
How are people meant to afford escalating property prices if disposable income is falling and the dent of austerity cuts which will lead to further income loss?. how are they meant to avail themselves of increased household wealth?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »How are people meant to afford escalating property prices if disposable income is falling and the dent of austerity cuts which will lead to further income loss?. how are they meant to avail themselves of increased household wealth?
Borrow more ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
grizzly1911 wrote: »The recovery of household wealth, if it continues, is a countervailing force against the decline in disposable income resulting from the payroll tax cut expiry and the parts of ongoing government austerity measures (including parts the sequestration cuts) that will directly influence consumer spending.
How are people meant to afford escalating property prices if disposable income is falling and the dent of austerity cuts which will lead to further income loss?. how are they meant to avail themselves of increased household wealth?
Borrowing.
Like happened throughout the 2000's.0 -
Graham_Devon wrote: »Borrowing.
Like happened throughout the 2000's.
exactly, this is what is going to happen, again, people where i work are all looking at houses and now offering the asking prices to get in quick !!
madness maybe but i can see it happening all over again we have had the 5 years of no real growth in the housing market and now all the cheap mortgages are coming back, FTB will be flooding the market soonEx HPC fool0 -
I think the signature at the bottom of HMcTs posts sums this up
The question is, are they in the half that are less stupid, or are they part of the more stupid half :eek:'In nature, there are neither rewards nor punishments - there are Consequences.'0
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