Monday, Feb 19, 2007
The gains in property value have been disproportionate, the problems permanent
Guardian: The boom is over, the price must yet be paid
By Ashley Seager, the Guardian's resident economist and self-confessed property market bear. "We do not get richer as a society from rising house prices. We merely transfer a burden to future generations who have to pay more for their houses. We shut out the have-nots who cannot tap their parents for a deposit. We lock in a permanent underclass who have no hope of ever getting on to the property ladder."
Posted by drewster @ 01:51 AM (169 views) Add Comment
7 Comments
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1. Davros said...
I too sense that the party is over.
The truth is, that the money isn't there any more. House price to earnings is now over 6, borrowers are limited to 5 time salaries and I'm sure the much mentioned migrants from Eastern Europe arn't bringing huge reserves of wealth with them. Combine this with higher interest rates and the best anyone can hope for is price rises in line with earnings.
Doesn't bode well for property as a long term investment does it?
2. paul said...
Good to see that the message is getting through.
I'm also happy to see that the article writer reflects on two key points:
1. The absurdity of the current market
2. The fact that rising house prices are not wealth creation they are simply transferring a burden onto younger generations.
3. Elpapasito said...
Great Article.
More and more people are seeing the sense in Land Value Taxation.
4. the bald man said...
Has any one told Gordan this. I thought this was the miracle economy?
5. george monsoon said...
I like this guy, he is realistic and astoundingly accurate.
Like many FTB's I have no owner parents from which to tap funds. So I am completely priced out by the greed of older generations.
Lovely.
6. tyrellcorporation said...
Gordon just looks at the lovely tax-take and the feel-good factor generated from the current situation - He doesn't give a stuff about anything else really.
7. The Capitalist said...
George, you're in danger of sounding a bit chippy. Look, if you own something and decide to sell it you might like to sell it for more than you paid for it. You are priced out at the moment, so just hang on in there, in the meantime build a cash deposit and wait. Your time will come!