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Sydney Morning Herald: Housing Market Ready To Pop

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Excellent conclusion in the article:

Housing may not be in a bubble, but we do place too much value in our homes. Partly this is the natural response to tax incentives that favour property investment, like negative gearing and the tax-free status of the family home. Partly it is because housing is a ''superior good'' - that is, as our incomes rise, we are happy to devote and increasing share of our income to it.

Ultimately, homes are only worth what people are willing and able to pay. As individuals, we may enjoy the benefit of windfall gains from higher house prices. But from the perspective of a society, it is a zero-sum game. It results in a transfer of wealth from young buyers to typically older sellers.

Increasingly, those who seek to benefit from rising house prices must do so in the knowledge that their gain represents the pain of a first home buyer who, in so many cases, could remind them of their own children.

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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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