Property investors look away now.
Do not read this article “Why house prices have further to fall”.
“There is one simple reason why house prices need to drop: for decades, they have risen many times faster than wages.”
and then there is this table:
25 years of house prices and wages
| Year | House
price |
Yearly
wage |
Price/wage
ratio |
| 1983 | 31,636 | 8,564 | 3.69 |
| 1984 | 34,308 | 9,298 | 3.69 |
| 1985 | 37,286 | 10,005 | 3.73 |
| 1986 | 42,302 | 10,790 | 3.92 |
| 1987 | 48,875 | 11,648 | 4.20 |
| 1988 | 65,504 | 12,782 | 5.12 |
| 1989 | 68,831 | 14,014 | 4.91 |
| 1990 | 68,858 | 15,371 | 4.48 |
| 1991 | 67,198 | 16,583 | 4.05 |
| 1992 | 61,594 | 17,696 | 3.48 |
| 1993 | 62,564 | 18,403 | 3.40 |
| 1994 | 62,066 | 18,829 | 3.30 |
| 1995 | 61,127 | 19,568 | 3.12 |
| 1996 | 65,674 | 20,353 | 3.23 |
| 1997 | 69,220 | 21,679 | 3.19 |
| 1998 | 73,010 | 22,875 | 3.19 |
| 1999 | 81,386 | 23,670 | 3.44 |
| 2000 | 85,999 | 24,627 | 3.49 |
| 2001 | 96,076 | 26,042 | 3.69 |
| 2002 | 121,426 | 27,342 | 4.44 |
| 2003 | 140,130 | 28,174 | 4.97 |
| 2004 | 161,288 | 28,626 | 5.63 |
| 2005 | 169,445 | 29,645 | 5.72 |
| 2006 | 186,242 | 30,800 | 6.05 |
| 2007 | 196,002 | 31,616 | 6.20 |
| 2008 | 164,225 | 32,978 | 4.98 |
| Increase | 419% | 285% | - |
Sources: Halifax House Price Index; Office for National Statistics (mean average for full-time male gross earnings)
This may all seem a bit dull. But as a house is the most expensive thing we ever buy, dull is sometimes important !!
