Roger Bootle in the Telegraph has a sane appraisel of the real value of property, and who gets hurt by property bubbles.
One of the effects of a period of falling prices is that much of this excess property holding will now come on to the market, exacerbating the fall in prices. But the benefit is that there will be some people who will now be able to afford to live in decent accommodation which they previously could not afford.
There have been millions of people whose lives have been distorted by property considerations – people forced to move, or prevented from moving, forced to commute long distances and/or live apart from their families, people who have refrained from having more children, or indeed any at all, because they could not afford decent accommodation. As house prices fall, these people’s life choices will be different.
Once the downward adjustment in prices is over, what we need is a long period of broadly stable house prices. This would make an enormous contribution, not just to the efficient allocation of resources, but also to human health and happiness.
And prices here are falling rapidly. About time.