"house prices have increased since the dawn of time"
Yes? And? I guarrantee that unless an asteroid hits the planet and causes some massive catastrophy that house prices will always go up on average over time far better than any saving account. Always.
And by not investing in housing in some form you are committing a far more serious one.
But over what time scale? Look at Tokyo property prices:
Err yes, look at the ludicrous over valuation of the Japanese economy that preceded it. The Americans laughed when a former Japanese prime minister described the Japanese economy of the 1980s as being "as fragile as a butterfly's wing." The PM was right, at the first sign of a hiccup in the world economy, the Japanese economy crashed.
"Jeremy Sanders" wrote
Point taken! :-)
It still shows that house price rises cannot be taken for granted over even
10 year periods. The Japanese economy may have been particularly fragile, but as other people have pointed out here, there are some indicators that the UK economy may have problems soon.
Sure, but there's no law that says that they have to stash 'em in Japanese banks. The carry trade is based on borrowing money at zilch in Japan and investing it elsewhere.
FoFP
Even so, that 'crash' is relative, whats the GDP per head there vs here?
"M Holmes" wrote
Yes, but likewise there was nothing to stop them investing in property outside Japan!!
You need to compare like with like...
The people who scoff at ridiculous Japanese overvaluations show scant understanding that the current valuations here will be seen in a similar light in the future.
There's a strong argument that things are in fact likely to go more badly here when our credit bubble bursts. The Japanese, at their worst, were still saving a substantial fraction of their own salaries. That's really not the case in much of the west, and certainly not in the UK.
FoFP
Are you unable to do your own research?
GOP per capita:
Japan $30,700 UK $30,900
Eh? What has that to do with the UK property market? Look if you don't want to invest in property then fine but I have constantly found they offer far better returns than saving accounts over a 10 year period or more. Yes they are at a peak right now but you have to look long term and what has Tokyo got to do with anything?
Decade long declines have been a feature of the UK property market.
Longest real house price declines -
Peak Surpassed Years
1970 1983 13 1971 1985 14 1972 1987 15 1973 1985 12 1974 1985 11 1975 1982 71987 1997 10
1988 1999 11 1989 2000 11 1990 1999 9 1991 1998 7Daytona
Your "guarantee" is based on nothing but faith. It's like saying:
"It's hasn't rained for the last 100 days. Therefore I guarantee that it won't rain tomorrow"
It might in some cases, if the surrounding location has improved. Of course, this can also work in the opposite direction.
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