This is of great interest to any investor out there whether you're looking at bricks and mortars or the stock market. Have a go and let your comments flow.

To start off, here is an interesting article below:

Is property overpriced and due for a correction, or can the current level of house price inflation be sustained? Depends on who you listen to...
Prices-To-Earnings Ratio. If you look at the ratio of house prices to earnings it certainly seems that the market has overheated and is in need of a short sharp shock.

Viewed relative to net pay, prices, says the Nationwide, are currently 7.2 times average earnings, slightly above the 7 times earnings recorded at the height of the eighties boom.

It's this grim statistic that has seen first-time buyers priced out of the market, and according to Capital Economics the price-to-income ratio is the main reason why values are bound to fall over the next three years (by 20% in all).

Sabina Kaylan of Capital Economics says: "Property is an asset like any other. If it's overvalued there will be a correction in prices and at the moment values are high relative to incomes.

"It would be nice to believe that it will all have a happy ending but in the past that hasn't been the case - the graph shows spikes and troughs - we don't think a gentle levelling off is on the cards".


cpeck

Hi Gf,

America for a few weeks.Moneyam is an EXCELLENT site so still like visiting.
rgds aj