property for nickoo

  1. 504 Posts.
    If you were talking about car prices, which deteriorate in value and have a use by date I would agree with you.

    buy a car today at 40000, buy same in 2015 mv say 5000. Your borrowing power in 2015 is the same with the car, it is just the car in 2015 is now an old bomb. It is not sought after, no one wants it. They all want the new car.
    Houses are different, everyone wants them, only so many available in popular area. So they fight over how much to pay to live in that area.

    I think you are saying with inflation what you can buy now, you should be able to buy in 15 years time for a lower price. so property in your theory should drop.
    It works for the car but not real estate.

    In fact it goes the other way, you have less borrowing power, you can now only afford a 265000 house and property prices have increased. Your 400000 house is now worth well lets see-15 years @ 10%pa is 600000 increase, it is now a 1 mill property.

    Interest rates today 6%, 1989 at 18%. 1994 ? 11%

    Good luck

    My personal very general view of subject only. do not listen to me. Just another point of view on this subject.
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