An article in yesterday’s Sunday Tribune had a commentary on the propertry crash, its causes etc. What interested me was the graph which tracked annual CPI compared with houseprice inflation. It shows a strong correlation between CPI and houseprices for c. 20 years prior to the spike we all know about from 2002 onward. The article is attached here but the online version doesn’t contain the graph unfortunately.
The graph shows that houseprice inflation has now almost returned to the pre-boom level (the indices were last “equal” in 1998). When the houseprice inflation index does indeed return to the more normal CPI level, does that indicate that some sort of parity (and perhaps even normality of sorts) has been restored between CPI and houseprice inflation in this country?
I’m probably being an ignoramus and missing something obvious but just curious if anyone else read the article.