No House Price Growth for 350 Years

[freddie]

It is whatever you think is the most reliable way to measure increase/decrease in standard of living. That is what you base your decisions on. None of us pay official interest rates on our borrowings, and none of us can go to the supermarket and insist on paying only the official CPI increase on the price of our wheeties compared to last month.

Exactly. You must therefore agree that ym's assertion as he expressed it is not universally applicable. And by the way - what is the relevance of "standard of living" to ym's assertion? Goalposts again?

 

[Trogdor]

AND you should compare the mortgage rate to the increase in wages not the cpi. The property is more likely to increase in value in line with wages (ie ability to pay) than cpi which is influenced by factors beyond our shores, such as price of oil. Australian employers may not be able to pass on such costs. This, of course, is a decreasing of living standards but who can be sure that won't happen?

CPI will flow through to wages in time!

 

[yieldmatters]

Quite a bit of goalpost moving here. The original claim was with regard to real interest rates. I've always thought that was best expressed as official interest rate minus official inflation. Now it appears you mean mortgage rates minus wage inflation. Hard to keep up.

The original proposition is you could just buy and hold and inflation would make you money. So in that context OFCOURSE I am talking about mortgage rates! No goalpost moving - you were lost.

 

[Aaron Sice]

CPI will flow through to wages in time!

how much time? in time for when you purchase tomorrow? or just generally, after the 90 day flow-on effect....?