More missing the point

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There is a lot of point-missing going on this morning. Is there something in the air? This article talks about the fact that cheap money has driven up house prices, but the author fails to understand that if interest rates were raised, housing would still be just as unaffordable. Prices would drop but monthly repayments would stay the same as it is these that fix the price levels. The primary value of real estate is its annual rental, not the selling price.

Low interest rates have indeed sustained a bubble, but the way to deflate it is through effective property taxation.

 

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