For a lucky few, the inflation of urban land prices has brought massive profits
Sigh. This again.
No it hasn’t. Inflation is not profit. It’s inflation. How you can tell that it’s inflation and not profit is that when you sell up and buy again, the price of what you buy has gone up by just as much as the price of what you are selling. If it were profit, your house would have gone up in price but nobody else’s would have.
The reason why houses, and all assets however dubious their value – including classic cars, art, and crypto currencies – have inflated is because, as interest rates on money are negative, you’d be stupid to hold money. We have inflation of about 6% but interest rates of 1% so in a year’s time your money buys 5% less. It is thus rational for people to put money instead into the things money buys, rather than into the bank where their money simply erodes, because money’s becoming worthless.
It is a profit if you own multiple properties i.e. the already wealthy. For those that own just a single home prices are largely irrelevant, and for those youngsters who haven’t bought yet rising house prices are a menace
Sigh.
This again.
No it hasn’t. Inflation is not profit. It’s inflation. How you can tell that it’s inflation and not profit is that when you sell up and buy again, the price of what you buy has gone up by just as much as the price of what you are selling. If it were profit, your house would have gone up in price but nobody else’s would have.
The reason why houses, and all assets however dubious their value – including classic cars, art, and crypto currencies – have inflated is because, as interest rates on money are negative, you’d be stupid to hold money. We have inflation of about 6% but interest rates of 1% so in a year’s time your money buys 5% less. It is thus rational for people to put money instead into the things money buys, rather than into the bank where their money simply erodes, because money’s becoming worthless.
It is a profit if you own multiple properties i.e. the already wealthy. For those that own just a single home prices are largely irrelevant, and for those youngsters who haven’t bought yet rising house prices are a menace