Here’s another fun piece economic linguistic orthodoxy: the ‘health’ of the housing market.
If the house prices are rising, the housing market is said to be healthy. Sometimes the metaphor is stretched a little and modest rises are referred to as ‘signs of returning to health’. It’s a beguiling image, which presumably is why it’s so popular and massively widespread. For one reason or another it’s not employed to describe price falls – the housing market is not ‘sick’ or ‘ill’ or in ‘failing health’. Maybe because that would imply the it might one day die, which would be a little hard to imagine. Instead, when prices fall the anthropomorphisation is thrown off and less human, more impersonal metaphors are employed. Housing markets in decline ‘fall’ or ‘crash’.
So inevitably, we feel a little more warmly towards those higher prices. ‘Up 3.1%? Yipee!‘ Except: why is a house price rise something to be celebrated? It means that the buy-sell-buy merry-go-round of imagined profits might be cranked into action once more, creating (whisper it) another house price bubble.
It should be obvious by now, post-2008, that ZIRP low-low interest rates, inflated consumer spending creating zombie economies isn’t the way to go. At least not if you’re a saver, someone who will rely on a pension one day or not on the merry-go-round, sorry, property ladder.
Why continue with the policy then? Because if you have a hefty property portfolio and access to the free money created by the central bankers (hello, super-rich!) then it’s the way to keep the party going. And if you dodged the bullet last time the bubble popped, who’s to say you can’t pull it off again?