Homes are the largest expenditure item in any one's income. That is why boom and bust in real estate can cause catastrophic consequences. So how much should real estate prices be allowed to escalate.
If real estate prices are to go up by 1 percent per year, it will take 100 years for a piece of real estate to double in value.
If real estate prices are to go up by 5 percent per year, it will take 20 years for a piece of real estate to double in value.
If real estate prices are to go up by 10 percent per year, it will take 10 years for a piece of real estate to double in value.
If real estate prices are to go up by 20 percent per year, it will take 5 years for a piece of real estate to double in value.
When real estate prices go up too rapidly, people wants to speculate in the stock market rather than go to work.
Views expressed are solely my own
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