Loading ...Ah. No. House prices can’t go down! ‘cos then too many mortgages would be under water forcing sales so house prices go down further …
No. House prices can’t go down because then the consumer will ‘feel’ poorer and stop spending because of the uncertainty, of the event horizon of prices falling for the first time ever (in their goldfish type memory banks).
In the land of the perpetual election cycle short term econopolitics is the only type.
Our three kids epitomise it. One has heaps of equity but a large mortgage (relative to their salary, anyway, always a bit of month left at the end of the money). Number two has two properties with some equity in each. Some, not a great cushion. The youngest doesn’t have a house. So, not that anyone wishes ill on anyone else, but the youngest wants prices to fall, the middle one wants them to keep galloping up, and the eldest doesn’t really mind so long as they don’t fall more than 30%! Fortunately the youngest has most of his savings in yellow stuff, so at least his deposit is staying ahead of the market slightly.