Can someone tell me why it is that we are so obsessed with house prices?
Or rather, why it is that economists look to house price trends as an indicator of national economic health? You see, as a homeowner, I understand from a home owner's perspective that it is nice to know that the house you are buying is worth more than the mortgage you owe - but as far as I'm concerned, that is as far as it goes.
We live in a nation with a population of some 60,000,000 people but less than 30,000,000 homes - it is hardly surprising, given the levels of new immigrants arriving and the boom in people living alone, that house prices tend to trend upwards even in the deepest of recessions.
But as an indicator of economic health they are largely irrelevant - or if they are relevant then increasing house prices should be a worrying sign because that inevitably means more people taking on more debt and with the debt burden already at unsustainable levels I don't think that is a particularly good idea.
However, it seems that the economists - and our government too - think it is. Why?
I think it is because they believe that this is the only way to maintain the living standards we are used to - by borrowing more and more money based on the future value of our property. That is the only place our "wealth" can come from now - the land and the assets that sit on it. We don't produce enough of anything anymore to maintain a proper economy so we have to grow our economy by borrowing more and more money.
I think this is crazy and will, eventually, come back to haunt us dreadfully.