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House Prices As A Function Of Gdp

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Thought this might be interesting. Seems to show the cycles nicely.

Kind of the ultimate house prices vs. income chart.


Edit: Forgot to say, house prices are Nationwide, GDP is from national statistics.


Edited by echapps
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Nice one.

This shows what bulls.hit the arguments are that the number of women in work, the level of divorce, the number of singles etc explains high house price to income levels.

When you take the aggregate level (as the graph shows) then either:

1) Britain has decided to permanently spend more of its wealth on property


2) we are just at the top of the latest cycle of boom/bust (i.e. it isn't "all different this time", it is entirely the same).

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  • 3 weeks later...
Also added re-based (and GDP-adjusted) FTSE-100 for comparison.

I read an article a few years back that suggested that house prices and the stock market both indicated confidence in the future, and the fact that property was (and still is) expensive whilst the FTSE was low gave mixed signals. (High house prices indicate an expectation of future salary growth, whilst a low FTSE showed little confidence in UK PLC.)

It's interesting to see it represented graphically.

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  • 440 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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