House prices

Last post of the day, ‘cos I am tired of wading through the garbage.

I agree with David McWilliam’s piece in the SBP today re house prices. It’s really simple math’s. Houses are overvalued still, on their own terms – let alone what the shrinking wage packets and shrinking capacity of our mortgage lenders can stretch to.

House prices are double what they should be, if you are to look at them as financial assets rather than homes. Since so many persons who bought multiple houses and apartments as their ‘pension funds’, they should still be doing so. But most will not.

There will be denial or claims that they are in it for the long haul and it all come right in the end. Of course, our dangerously low interest rate make it easy to continue with the denial, as the point of illiquidity is pushed out along the timeline.

I feel really sorry for those trapped in negative equity by the horrible trap that the major parties of this country lured them into over the last 20 years. If the people do not get an equitable solution to this then I can see the seeds of revolution in this crisis.

Enjoy your ‘green shoots’ while ye may.