The same effect that occurred between 1965 and 2007 during which period property prices grew at an average of 10% p.a. leading to the credit crunch and austerity of the last seven years.
In 1965 ,the average house price was just under ￡5,000 and doubled every 7 years till 2007 when it was ￡162000.Coinciding,incidently, with the periods of economic and industrial upheaval.
With the average price now ￡250,000 and doubling every 7 years(?) at 10% p.a. (?) , then by 2028 the average price will be ￡ 1,250,000 . This means that the first time buyer ,with a ￡250,000 deposit will require a salary of ￡250,000 p.a. in order to get a mortgage.
All hell breaks loose.
Nah but realistically, many already disadvantaged people will have even a harder time dealing with price changes. I dont think anybody would want that to happen... and if prices do go up people's wages and salaries should go up too so that satisfying consumer demand is met. And so when people spend, it should be a good factor in stimulating a better economy where there's both injections and leakages into an economy for stability and annual growth of, for instance, a countries GDP.
inflation is a dangerous thing if it gets out of control and it is hard to control 10% is a high rate in order to keep up everyone seeks !0% increase and this can steadily climb as the usual greedy ones want the extra
and so it gets out of control as in Germany in the 1920s till a single stamp cost billions of marks the then currency wages were taken home in wheel barrows it was horrendous you see it like a stock market crash panic sets in money becomes worthless
You get inflation and your debts become cheaper (if they are fixed interest). I remember this in the 70's/80's
Food prices etc went up almost weekly but everytime I got a pay rise my mortgage (fixed at 10%)) disappeared to next to nothing.
The price doubles every 8 years. In most cases it causes rampant inflation, however housing is a slightly different case because houses don't change hands for cash on a weekly basis and are not consumed like the majority of goods. House price inflation at 10% is actually fairly stable, this is because it is driven by an average 3% inflation rate and a 3.5x safe lending multiplier that most banks used prior to some fool deciding that a borrowers ability to repay was best calculated using the projected earnings of their great grandchildren.
This can be in anything for example: housing market UK.
