apom Report post Posted October 26, 2005 House prices are 4 times average salary. this is because the economy can't support any higher.. any sway from this is common, but in each case it has swung down to below 4 times as the economy is throttled by debt repayments. This either happens through price drops or inflation or a mixture. Higher prices could be maintained if the economy was able to change as rapidly as house prices. It can't. The economy never say's "Ahha, that's where the money is now, I shall quickly re-align to make use of it.." It says "Well the money used to come into here.. now its over there.. But I can't change.. I need it where it used to be.. now there isn't enough there.. I am struggling.. oh look.. recessive tendencies... damn... oh.. inflation.. interest rates need to go up.... essentially I am a big rock.. I can't change and I will return to my natural balance.. ..there you go.. its fine... " If this made sense to you.. well it makes sense to me.. High house prices are an aberration.. they always have been... always will. Quote Share this post Link to post Share on other sites
