aSteve

They might be the same thing. It depends. If real interest rates turn negative, and default risk can be segregated - for example, using a family member, or through a limited company... then an inert asset with low maintenance costs has good fundamentals as an investment... otherwise not. The only complications are in: a ) Measuring inflation - this is probably best thought of as inflation in disposable "income" - though expanding debt is income in this context. b ) Measuring interest rates - which has been far more complicated after the deregulation of financial markets... means that we need to concern ourselves not only with our domestic rate - but also the rates of foreign currencies - adjusted for exchange rate risk. Sound fundamentals? Not if you think working class people deserve to own a debt-free home; possibly so if you think they're better off renting.