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Quote: In the meantime I'll rely on the fact that if yields are low, credit is cheap and plentiful, that the true value is a lot lower than current prices. Who would do this? Not me. If the true value is lower than the current price , I won't buy. This is also because we are moving...

Wow, I'm more confused than ever. :confused: Looks like its impossible to calculate the true intrinsic value unless you can predict the future and gauge all the likely macro and microeconomic influences that will affect the future earnings which will vary according to each persons IRR...

I'll have a go. A few different methods could be used 1) the intrinsic value of a house 'should' be the Net present value of its future potential cash flows. 2) replacement cost less wear and tear Although 2) doesn't help calculate the land value. Land value is the most subjective...