If property prices are not growing at the inflation rate or wages growth rate of approximately 3%/annum, then they are falling in value in real terms. In the areas I am looking, RP data reports price growth of 0% over the last 5 years.
If these areas were to have had no price growth in real terms over 5 years, they would have had to rise by 16% using 3% annually compounded growth, to have gone absolutely no-where in real terms.
Sure things may pick up to justify reports of annual rises of 2% etc but that is still a big fat loss in real terms to me.
No matter how the feel good media spins it, the massive gains of the property market are a think of the past.
This won't stop me buying a property later this year, I just don't expect it to be a good financial investment. It will be a dog of an investment. But I am not buying it to make money, I'm buying it for what you use a house for. Which isn't a mega leveraged investment get rich real quick instrument. Some people still think it's the latter, but with so many years of no longer doubling every 7 years, they will get sick of waiting and begin to unload IMO.
