If we needed a reminder that financial markets are driven by greed and fear rather than rationality, the last couple of years have provided it. But amongst the wreckage of broken Governments, bankrupcy and unemployment, I wonder whether there's a ray of hope in the housing market?
I mean by that, not (please God) that it's about to take off again into unsustainable 'growth'. Rather that it might just stagnate and drift gradually lower relative to income, making it more affordable for those starting off and less of a millstone for the middle aged. Imagine the spending power released by say, a gradual halving of values in real terms over say 20 years? Imagine the relief of not spending a lifetime shackled to a crippling mortgage? A home becomes a home rather than an 'investment'. And a whole industry of lawyers, agents and other middle-men have to find more useful things to do than encourage us to 'trade up'.
Ah, but what about those of us who thought we were sitting on (in) a nice fat nest-egg? Well look at it this way. We're just giving back what we never really earned. And wouldn't you prefer your children to be able to afford to live a life, paying their way, rather than being dependent on inheriting your (good) fortune, or never even having the chance that you had?
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