You also appear to have either forgotten or failed to understand the lessons from history which I have previously posted, so here is part of the New York Times commentary on the Eichholtz study on long-term house prices versus inflation.
http://www.nytimes.com/2006/03/05/magaz ... .html?_r=0
Interesting Article, thanks for that. Were you and Pieter childhood friends?? Sorry couldn't resist!!
The excerpt below is probably a more telling summary of this particular study of ultra long term house prices. I also think there is a bit of cherry picking when it comes to explanations of housing prices, using inflation adjusted numbers in comparison to nominal prices over certain periods. The study shows that we are in an extremely great period of time when it comes to housing prices on a global basis. When will that end, March 2016? A decade from now? A century? Will it take a World War, a plaque, or some other disaster (earthquake anyone)? The Plague (14% of the population of Amsterdam died) coupled with the collapse of the tulip market resulted in a 36% drop in real estate values. Therefore I would suggest a 15% tax on foreigners, especially when we are opening the floodgates for immigration maybe won't be the catalyst for a long term reversal of our real estate bull market.
Beyond that, probably few homeowners in 2006 are worrying about how much the value of their homes will have increased by 2206 or 2406. It's 2 or 5 or 10 years down the road that matters, and neither Shiller nor Eichholtz is willing to go out on the limb of making definitive short-term predictions. The value of studying a really long term housing market would seem to be less in revealing the how and when of downturns as in underscoring their inevitability. Really bad stuff happens, and when it does, there is often a collapse in real estate.
Also an interesting article on Inflation http://www.retirementinvestingtoday.com ... ation.html
This shows quite a difference in inflation numbers before and after the decoupling of the USD to Gold. After 1933 inflation has averaged 3.7% ... Your article about Holland showed over 350 years through plaques, tulip crashes, wars, invasions and more wars, housing beat inflation, and that doesn't include the global housing boom, where that old house tripled in value over 22 years (and since article is from 2006, I'm going to guess is has probably nearly tripled again since 2006). An investment that beats inflation over 350 years ain't bad, coupled with leverage through the use of debt to magnify your gains and where inflation works to your advantage. This sure beats socking away your money under the proverbial mattress over the long term.
this chart demonstrates a point that government will always choose to inflate debt away at the expense of savers if given the chance. They could not do this under the gold standard.
Last point, we are headed for 8 Billion people on earth by 2025 and the lower mainland ...
The population of the Lower Mainland was up 9.2 percent from the 2006 census. This is among the highest growth rates in the continent.
hmmm that might have an effect on our housing market