I remember having seen this graphic in an article published in NRC Handelsblad (Dutch leading newspaper) on November 2007, “Highest house prices in almost 300 years”.
Now, some thoughts come to mind:
- Once adjusted for inflation, we see the prices have moved during last 300 years in a range from 500k€ – 2.5 M€… so, the highest price is merely 5x the lowest price. In other words, house prices are relatively stable… Should it be otherwise? What worth/assets are extracted from a house?
- If you would have put those 500k€ in the year 1650 in some stock or deposit that assured you a 1.5% above inflation, by the time the article was published, end 2007, you would have around 103 M€, 40 times the price of that house at highest housing peak in Dutch history… there will still be people considering houses a good investment.
- Not to mention what would have happened to the family who had set up a business back in 1650 and had continued with it all along these 300 years.
Already that summer, in August 2007, we had a warning on the ongoing bubble in the stock markets…
Note: the translation of the graphic was provided by Google and later checked by Luca… (it wasn’t me, not yet).