Wednesday, Oct 07, 2020

Despite Covid, at the macro level house prices still are rising pretty much everywhere.

Moneyweek: House prices are rising across the globe, not just in the UK

John Stepek points out that even though we are in the midst of a pandemic, low interest rates and a general lack of material shocks (cushioned in no small part due to government action) has meant that first world house prices have remained surprisingly resilient.

Posted by landofconfusion @ 01:14 PM (1765 views)
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1. mombers said...

Was going to post this too. It's enough to make a cowboy shoot his own horse. Markets can remain irrational longer than you can stay solvent...
Governments will stick at propping up house prices for far longer than anyone would have thought. Eventually when only a few dozen people in the UK are homeowners then maybe a rethink will occur...
If my home is worth half of what I bought it for in 20 years' time, I'll be laughing, as my kids won't be completely stuffed, and my mortgage will be maybe 10% of that value anyway

Wednesday, October 7, 2020 02:43PM Report Comment

2. landofconfusion said...

The thing is it's not a fair market. No market is when there's state intervention aimed at transferring wealth. And as you suggest this can and will continue for as long as people allow it.

As for the young I have little hope for them. There was a discussion in the forums here a little while ago where a Boomer asked why if things are so bad are there no protests? That was the point I realised that that was how they (the Boomers) did it. From a young age their priorities were radically different from today's and they were much more willing to protest and create a scene when not satisfied.

But now we have at least two generations of young seemingly willing to line up and get sheared before being kicked out into the cold, winter night. And so precious few of them are doing anything about it.

Wednesday, October 7, 2020 03:16PM Report Comment

3. nickb said...

yes, I just shot my horse. I may now actually cave in to pressure from my other half to buy a place :-( Perhaps what is really going on is this. As we transgress limits to growth or for other more immediate reasons such as deindustrialisation in creaking old first world economies like the UK, we will continue to have less and less productive economies. So the only game in town is to buy up existing assets such as land and property. Perhaps the mass unemployment that is coming will see not a collapse of asset prices but a stagnation. Anyway, if I buy I am sure to precipitate whatever downturn is coming, realising the losses of an 18 year wait.

Thursday, October 8, 2020 11:20AM Report Comment

4. mombers said...

@2 'The thing is it's not a fair market'
Any market that you are FORCED to participate is not fair and crucially not free. E.g. water - just about everyone has to participate in the water market, which is a natural monopoly. So price controls are required. Compare to food market - there are many substitutes, e.g. you don't have to eat potatoes. Even within the potato market, there is ample competition so prices include a normal profit margin. The land market is a natural monopoly as the supply is absolutely fixed. You can't substitute a Scottish highlands piece of near zero rent land for a London plot. You can't magic some new land out of thin air adjacent to your home. Even if you have vacant land next to you, planning restrictions often prevent its use, but nonetheless even if you could, that piece of land coming into use reduces the supply

Friday, October 9, 2020 10:18AM Report Comment

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