Avalon
5 Sep 2012
Real Estate / Poland's apartment prices continue to fall [1844]
Lets stick with the the example of my home city of Bristol which I gave yesterday but lets go back over a 12 year period:-
Average Property Selling Prices in Bristol (£000's)
Apr 2000 May 2012 Change
Detached £149,481 £313,687 +110%
Semi £100,102 £210,581 +110%
Terraced £78,086 £182,606 +134%
Flat £83,464 £174,151 +109%
All £94,706 £202,182 +113%
Inflation rate in the UK between 2000-2011 totals = 22.7% or 2.06% per year
Can you tell me the loss of the property capitol due to inflation?
The government gives the figures for inflation by using a "basketful" of goods and services and monitors their prices over a monthly period. I believe they exclude mortgages and benefits.
Since 2008, most people have been cutting back on their expenditure and shopping around for cheaper bargains. A lot have been repaying debt and forgoing holidays and new cars. Many people deal in cash with their business's so it would be safe to assume that not all this money is declared as income. (basically the same way as people cannot understand how the Poles survive on 1500 PLN per month)
A slow steady inflation rate such as what has been seen in the UK over the past 11 years doesn't really hurt your wallet. Most businesses give yearly raises of three to five percent per year, and the yearly inflation rate has averaged out at 2% per year.
When inflation really hurts, is when it rises faster than wages. You can probably cope with a one or two year spiral of this sort, but when inflation out paces wages for an extended period of time, you will then feel the crunch, but with the figures as they are, only people who cannot manage their money and who over borrowed are going to be in trouble.
The cost of living has gone up 20%. Their capital has not been protected, it buys around 20% less. People haven't had wages rises, but prices have risen by 20% so they have less disposable income to save for and pay for property.
Lets stick with the the example of my home city of Bristol which I gave yesterday but lets go back over a 12 year period:-
Average Property Selling Prices in Bristol (£000's)
Apr 2000 May 2012 Change
Detached £149,481 £313,687 +110%
Semi £100,102 £210,581 +110%
Terraced £78,086 £182,606 +134%
Flat £83,464 £174,151 +109%
All £94,706 £202,182 +113%
Inflation rate in the UK between 2000-2011 totals = 22.7% or 2.06% per year
Can you tell me the loss of the property capitol due to inflation?
The government gives the figures for inflation by using a "basketful" of goods and services and monitors their prices over a monthly period. I believe they exclude mortgages and benefits.
Since 2008, most people have been cutting back on their expenditure and shopping around for cheaper bargains. A lot have been repaying debt and forgoing holidays and new cars. Many people deal in cash with their business's so it would be safe to assume that not all this money is declared as income. (basically the same way as people cannot understand how the Poles survive on 1500 PLN per month)
A slow steady inflation rate such as what has been seen in the UK over the past 11 years doesn't really hurt your wallet. Most businesses give yearly raises of three to five percent per year, and the yearly inflation rate has averaged out at 2% per year.
When inflation really hurts, is when it rises faster than wages. You can probably cope with a one or two year spiral of this sort, but when inflation out paces wages for an extended period of time, you will then feel the crunch, but with the figures as they are, only people who cannot manage their money and who over borrowed are going to be in trouble.