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House Prices, Nominal, Real And Qe

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In light of the imminent QE, how much of the crash will now be a nominal drop and how much will be an erosion in real price?

And when would be just as well buying a house (while our deposits are still worth something) and letting inflation take it's course?

Circumstances meant am I only now in a position to ditch Sterling......

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The situation over the past few months has been the reverse to what you're suggesting. Looking at the RPI data, it seems we've had 2% DEFLATION from September to December. This produces rather an odd result: nominal falls in house prices are now greater than the inflation-adjusted figures.

Whether QE will reverse this is anyone's guess. I'm not an expert, but I hear that once deflation sets in, it's very hard to correct.

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I was thinking about the reversal that QE may bring on.

Of course, some think that in order to suck the money from the system in c18 months that interest rates will have to rise pretty dramatically. That'll cripple the housing market in a different way.....

Sometimes I think that I should have stuck with Economics at Uni, but the rest of the time I think that I would have bought into received wisdom on subjects which appear to be insufficient at this time.

Getting out of this crisis is like trying to untie the Gordion knot.


Edited by CynicAl

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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