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Well, what is the total value of all real estate in the UK now? What it was 20 years ago? What is the nominal GDP now and what it was 20 years ago? Divide these
by anovikov 5y ago
Well, what is the total value of all real estate in the UK now?
What it was 20 years ago?
What is the nominal GDP now and what it was 20 years ago?
Divide these two fractions by one another and get a power of 0.05 - and multiplied by the current value of all real estate, this is what real estate owners make per year.
Now divide to the current nominal GDP and get the fraction.
I will be VERY surprised if it turns out over 10%. Most probably much lower. And i even forgot annual maintenance and immovable property tax, and the fact that older dwellings deprecate vs new ones.
Overall, society wide, return from ALL kinds of capital - financial and non-financial - combined is dwarfed by wage income.
I also wonder why people keep complaining on the rising house prices while no one ever complains on the rising stocks. Aren't these the same? Except stocks are rising faster on average, "rents" (dividend yield) on them is almost as high now as on the houses, ownership of them is not taxed, they don't need any maintenances, and are infinitely liquid. The only downside is that if they dip, they usually dip deeper than houses, but on the interval on which it makes sense owning the house (20+ years), this isn't the case already.
- pydry 5y ago>I also wonder why people keep complaining on the rising house prices while no one ever complains on the rising stocks. I complain. It's symptomatic of the same thing - earned income is an ever smaller share of the economy. People who work for a living make less / GDP every year and the difference gets channeled upwards either through rent or dividends. It wont end well.
- anovikov 5y agommm why? not really. stocks have been giving on average same returns - a bit shy of 10% before taxes - since inception. and proportion of earned income stays more or less the same.
- pydry 5y agohttps://www.economicshelp.org/wp-content/uploads/2017/11/Screen-Shot-2017-11-20-at-09.13.15.png.webp https://www.economicshelp.org/wp-content/uploads/2017/11/Scr...
- alimw 5y agoIs anyone going to do the sums? Just throwing instructions around and saying "VERY surprised if it turns out over 10%" doesn't really cut it.
- anovikov 5y agohttps://www.savills.co.uk/insight-and-opinion/savills-news/294601-0/uk-housing-stock-now-worth-a-record-%C2%A37.39-trillion-after-decade-of-gaining-%C2%A3750-million-a-day https://www.savills.co.uk/insight-and-opinion/savills-news/2... that's results at a glance: all residential real estate made it's owners 2743B pounds in 10 years, or about 15% of the GDP in the same period.