It should be blindingly obvious that comparing trends in house prices with trends in food prices is not justified. It is hard to believe that the people writing and promoting such articles honestly believe it is justified – it would raise the question of how they had enough working brain cells to operate a word processor!
- BBC: Food costs: ‘£50 chickens’ if food tracked house prices
- Daily Mail: A roast chicken for £50 and a £10 pint of milk: The price tag of food if costs had risen at the same rate as house prices
In fact, of course, they probably don’t believe it is justified, and I hope their readers don’t either. It is an interesting (but probably fruitless) way of making a point about house prices, as long as their readers are not analytical.
Why compare with food? Why not compare with computer chips? Although Moore’s Law isn’t exactly related to prices, it is interesting to see what food would cost had it halved in price every two years for 40 years. They don’t make coins small enough to pay the current price of a what a chicken would be! And a house that cost £30,000 in 1972 would now cost 3p.
Or: try comparing trends in house prices with trends in the times and costs of building railways. I suspect the Victorian railway builders would raise their eyebrows at the quoted costs and times (20 years) for building the HS2 railway. Yet the nature of the project is somewhat closer to the nature of building sufficient houses (on sufficient land) to satisfy the housing needs of young people and bring the prices down via the law of supply and demand.
There is no logical reason whatsoever to expect house prices to track the prices of computer chips, food, motor cars, or any other mass-produced commodity items that don’t rely on such a limited resource as land. Such comparisons are a distraction from attempting to solve the real problems.