The real value of housing

Many people believe, quite rightly, that shares are more volatile than property. Share prices can go up and down from one day, one hour or one minute to the next. But housing isn’t this volatile, is it?

Although they’re hard to compare directly like this, property looks much less volatile as it is usually only bought and sold (and therefore valued) once every couple of years/decades. What you don’t see is the price/value of property rising and falling in those years when it’s not sold.

If your house was bought and sold as often as, say, a parcel of BHP shares are, it would start to mirror the same degree of ups and downs as the shares.

Don’t just take my word for it. Ask a dozen people who are familiar with your place of abode the most they would pay for it. Then you could start to see the real volatility of bricks and mortar. After all, something is only worth what someone else will pay for it.

Comments are closed.