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Why is everyone happy when property prices increase?


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The majority, are in many cases wrong.

The minority (it's not actually a minority at all when you start to consider just 1 future generation), are at least correct.

 

Why are the majority wrong?Are you suggesting that you are smarter than 20 million home owners-that seems a little presumptuous?

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If you already own a property: falling values leave you largely unscathed.

Selling it and buying another would not be affected, as that other property's value fell too.

 

If you do not already own a property: falling values are god news. Maybe you might be able to buy.

 

So the fall is mostly good news (unless you're selling but not buying).

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Errr no.. My mortgage will be finished shortly..my kids have grown up,I can sell up,buy a smaller place and have a big lump of cash in my bank..

 

Until dementia calls at your door..Then watch and weep as your lovely nest egg is eaten away rather quickly by the care home...

Unless your family look after you of course.

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Its evidence based (read cyclones post) that he is right, and if the majority think otherwise then yes they are indeed wrong.

 

He said they were wrong to feel happy-I think he meant they were misguided.I cannot help it if he expresses himself ambiguously-people cannot be wrong when expressing a subjective statement ie an opinion.

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Equity is and always will be the most important thing in property and I'm surprised nobody has mentioned that. Technically it doesn't matter if you would have been (less in debt) in times gone by or (more in debt) now. Its irrelevant if you are in positive equity, its win win all the way.

 

House price rises can take home owners out of negative or make less negative Equity, and that can be a breath of fresh air for some home owners if they need to bail out of home ownership for any reason.

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The trouble is that equity can fuel inflation.

 

There must be plenty of people in the country who have equity well into six figures. For the most part, this is unearned income. If/when people decide to release that equity and spend it, we get inflation.

 

House price rises are generally not good for the economy.

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