Or are you saying that fundamental and speculative demand are the same thing???!!!!
So UK house prices had good fundamentals at £200k, because there were speculators buying?
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.
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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.