Alot of attention is paid here to real house prices and I don’t fully understand this importance.
If property prices are increasing but not beating inflation?
Presuming a more healthy demand vs supply and renting costing at least same as interest repayments **wouldn’t real house prices be irrelevant **because mortgage repayments would remain static in nominal terms and decrease in real terms while rents remain static in real terms.
What are the arguments against buying in such conditions?
I’m not sure I’m getting you.
Rent right now is substantially lower that the interest on a mortgage, and that’s before you factor in things like annual management company fees etc.
The Real vs Nominal house price debate is fairly meaningless when it comes to deciding whether to buy or rent at a given moment in time.
Really the whole Real vs Nominal debate only comes about when people want to argue about how much house prices rise or fall over a number of years.
-Rd
I’m not talking about the current market. What I’m trying to figure the importance of real house trends when deciding to buy or not when renting and buying show no aparent price advantage
If there is massive inflation and steady house prices, if you buy a property for €300k now on a 30K income (ten times your income) in five years time you will be earning 90k per year and the house price will still be €300k (3.3 times your income).