> People are always surprised when I tell them, in the long term housing can only increase an amount equivalent to inflation or wages I don't think this is tru

> People are always surprised when I tell them, in the long term housing can only increase an amount equivalent to inflation or wages I don't think this is true at all. Prices can outstrip wages easily when there's a large influx of new inhabitants, either through a high birth rate or through migration. See London over the last decade for an example. It's less common to see this effect in entire countries because it would take a vast number of people, but I do think it could happen. Prices can continue to rise if mortgages become cheaper to service: as we've seen over the last thirty years, declining interest rates and lengthening mortgage terms push up the price of houses. Prices can also rise if there is sustained outside investment - for example wealthy people outside the country looking for somewhere safe to stash their money (see London again). OF course, all of this is contingent on what exactly you mean by "the long term". But the UK has seen a sustained boom in property prices for a generation. That seems pretty long term to me.