The Future of House Prices

Weren't they already rich? Couldn't they already afford to do this? Isn't this a false bubble. It isn't organic?

Doesn’t this ignore the fact that there is connectivity between house prices and the income of the lower and middle class? At some point homes become unprofitable because ownership costs exceed renters’ incomes.

Good news; Trump has finally managed to decrease housing costs. All he had to do was crash the US economy, tank the jobs numbers and create a mass exodus from the US...on top of plummeting birth rates already underway. Yay!

In the last 2 years

Base Rate down from 5.25% to 3.75%

Average consumer goods up 5.4%
Average UK house price up 5.37 %
Average London house price up 2.76 %
Average weekly wage up 11%

One of Gary's best video!!!

I've been looking at your videos and I think you are absolutely right in the diagnosis. Assets are getting more and more concentrated in fewer fewer people. Which is why the price of Picassos is always going up! But it's no joke when the things we used to think of as being the basics (shelter, energy) are also becoming unattainable for more and more when it should be the other way round. It does seem to be the inevitable maturity stage of unregulated capitalism . Ultimately some of that wealth does have to be returned to the masses and it is better to do it through taxation than physical "kill the rich and take the assets " style revolution (which historically anyway always seems to at best give a temporary solution). The big question really is how exactly does one do that and do it successfully?

Gary the Commie's economics channel. "Tax the Rich!... Oh wait, they all left and now thousands more are unemployed. Doh!"

The no mortgages is interesting - I think there’s a duality with community integration and the influx of outright purchases. Building mega houses, gating them, different architectural construction regardless of area. No communication with those around them. It’s difficult

Who received all that COVID money in the UK and US? It wasn't me.

I can see where people look at Gary and see a guy in a skewed toque/ski hat that is hard to trust.

We really need a new anti-inequality party.

The only reason house prices rise , is because of demand for houses . There are too many people . We all need to think of limiting birth rates , voluntary, this is the the only way .

A 25 minute video where he doesn't mention once that housing construction has collapsed while the population has grown? Not a very important factor in housing prices growing apparently. More people competing for a scarce asset yet the problem is something else

1979:
Average house ~£20–25k, salary ~£7k → 3× income.
Even at 15%, interest on ~£20k was ~£3k/year.
Small deposit, manageable loan, wages + inflation quickly eroded the debt.

2025:
Average house ~£300k, salary ~£35k → 8–9× income.
At 5%, interest on ~£270k is ~£13.5k/year.
Huge deposit (£30–60k), rent kills saving, debt barely shrinks.

After the 80s, rates fell for 30 years, massively inflating house prices and wiping out mortgage debt in real terms, today’s buyers don’t get that tailwind.

Watching this in Dec 25, UK house prices have been flat or falling, in real terms we're back to 2002 now. Gary, you said prices were going to rise, did you mean after this initial fall? Do you think real house prices will ever recover?

He's always touching his face. Pulling his ears, scratching his nose.

How does buying assets from the middle class bankrupt the middle class?

It's quite depressing to see this and there's a lot of trust in this that I think we all inherently understand.
But we're almost certainly going to blame immigrants, vote for a far right party that will exasberate basically everyone of these factors and our country will go down the gutter and there's little we can really do about it...

Excellent analysis linking housing prices directly to wealth inequality, not just the economy. While the predicted collapse never happened, the aggressive asset boom is currently lagging slightly behind the author's timeline due to slower-than-expected interest rate cuts

Do you still stand by these predictions @garyseconomics? Even the upper end of the market?

I have been an estate agent and worked through 2008. The only thing that changed was that people stopped selling their houses. The only time prices have ever fallen is in a really really short time frame.

Well, it's dropping. So, this didn't age well. House prices are not rising faster than inflation and are dropping by about 0.6pc annually. So, stable and rising in line with inflation, if not slightly behind. So, maybe there is only so much the rich are willing to pay for a property, when the poor can't afford to rent it.

The housing crisis is only going to get worse. We need to look at alternative ownership structures, as there is a growing trend of co-ownership outside of traditional compositions (couples) like friends and siblings pooling resources and buying together. I’m building a community of first time buyers to get onto the property ladder together. Would love your advice Gary 🙏🏼

I personally think rents should be regulated i.e rents need to be capped at lha rates. Additionally heavy taxation should be applied to people who own more than one property if that property isn't being let at lha rates. A government paper evidences there are more than 220000 homes that have been vacant for more than 6 months. The wealthy are buying up swathes of property which creates a shortage of affordable housing as rents are unregulated. There's a shortage of affordable homes as opposed to a shortage of homes.

Please talk about how the lower birth rates in "western society" influence the housing market and the prices of houses and assets in general. I would imagine it has a positive effect on house pries getting more affordable, but what do you think?

Gary can you please comment on the predictions of a crash in property prices based on the 18 year cycle? E.g. Fred Harrison

You might have got that bet on the interest rate wrong 😅 end of 2025 and its 4% as we speak

In real terms, since COVID the housing market has dropped by at least 8% in the UK and much more than that (>15%) in parts of London. Nominal prices have stayed nearly the same for some 5 years now but inflation has been really significant, hence it’s being called a “stealth crash”. So it sounds like your prediction was not really accurate.

I like the jaunty angle of Gaz`ezs bobbley hat, as a working claaas laad myself it really endears him to me, innit.

My son and his girlfriend are trying to buy a flat right now. They sometimes send videos of their walk around a property. It's scary seeing firstly how many ex council flats are being sold by private landlords, secondly how often a small flat has been made into a shared place with every room as bedroom or else a family with kids squeezed in and third the estate agents asking "are you buying this to live in?" Like that's not normal!

Why not let the rich pay more taxes?

gary can you run a hedge fund for the poor and middle class only

Man of the people from a working class family who’s seen behind the curtain, very clever man, great read his book.

There should be a mechanism that favours all to buy 1 home. The ability to buy a second third etc home should exist but not at the expense of not letting another afult buy their first home. Policy and incentivising the right fields to enable the vast majority of people to work is tricky and something another will have to discuss and implement but that idea would change things. This isnt really a socialist idea, more a moral idea - there will always be more economically capable and less calable people but we shouldn't have poverty in a relatively rich country.

What if as an act of rebellion, every young person would live at home, could it have a serious impact on the people holding properties?

Rich people are blind 💔
And the peoples hearts are crushed to a paste

Something needs to change for the better, hopefully with kindness, love and understanding as a driving factor, violence should not be an option

South Korea should also know about it.

Gary, love your work. I have a question that really troubles me and I know there is infintessimally small chance you'll ever hear this question, but what will happens as governments can't keep printing money? I'm expecting that to be a realistic scenario in the next five years. For example, what will happen when social security gets cut or the USA misses a debt payment (to itself)? Would that then in turn make asset prices go down? All the best, Susanne

Gary’s bullshit!

To my uneducated self, it feels like there are two economies: the economy for the rich, where they keep getting richer and the stock market keeps going up, and the economy for everyone else, where quality of life is going down and electricity/gas/groceries etc keep costing more and more, and everyone is scrambling harder and harder to stay in the same place