The ability for sustainable higher property prices heavily depends on future interest rates and income growth. I am most of the time not the brightest person and having not build up a reading habit, some profound way of getting the point across can still be a challenge for me. That is the impression I get when I came across this article at The Basis Point. Essentially it is a guest account of how a money manager friend of the author views his home. As investors or as home owners we can learn a fair bit from this as well.

Interest Rate and inverse relationship with Bond Price and House Value

We all know that when interest rate goes down, the value of bonds in the market goes up. When interest rate goes up, newly issued bonds have a higher coupon than bonds in the market, so bonds in the market ......