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 Originally Posted by macduffy
Interesting if I read it correctly house values make up 5.42% of the CPI, so not likely to play a big part in the overall CPI calculation. I guess rents, rates and power have been going up just as quickly as house prices to have a 7% compounding increase in housing costs over the last 20 years.
Rent makes up 38% of the housing cost sector and home ownership 23%. So the 7% compounding is not just in house prices but rent, power and rates as well. I assume rents are rising to justify the price being paid for houses as an investment. Still these prices are rising at nearly double the wage portion of the CPI.
It almost makes discussion of house prices and the CPI irrelevant. Quoting the CPI is a way to obfuscate discussions around asset price increases caused by monetary policy. It is sort of working in Japan so maybe I am getting upset about nothing. It is just that I am on the bottom of the ladder not moving up very far and currently not sure where the next rung is to climb the ladder of financial success.
Maybe working instead of posting on sharetrader is a better way forward.
Last edited by Aaron; 14-10-2020 at 03:19 PM.
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