Debunking the myth of house prices

This is an interesting graph courtesy of Chris Dillow at Mumbling and Stumbling.It debunks the myth that house prices ran ahead of the rest of the economy by comparing price rises with GDP since the 1950's.

Since the end of 1955, house prices have risen 2.7% a year in real terms, whilst GDP has grown 2.4%.

It is interesting that the correction currently is bringing the price back in line to the levels of around 2001 and

Over the long-run, house prices rise more or less in line with GDP.