There are two key points here.
The fact you are missing is that wages change every 10 years. Do wages double every 10 years? It would appear not. However, most wages rise to beat inflation (or people change jobs to a place where you don't earn less each year as years go on). A reasonable 5% wage rise compounded over 10 years is a 60% increase.
I doubt very much that the broad assumption of house prices doubling every 10 years is correct. In a given 10 year period I believe it is possible to double or even triple depending on your timing of the very bottom to the very top.
You will find that the ratio of price to earnings when graphed is a curve as such:
- Forums
- Property
- housing doubles in value every 10 years
housing doubles in value every 10 years, page-2
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Glen Diemar, MD
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