Mortgages in the UK aren't like in the US, even now it's rare to have more than a 5 year fix, meaning you buy a property and, if interest rates go up, and prices crash, you're left on the "standard variable rate" 5 years later, paying 10-15%, leading to repossessions (especially if it happens now after 13 years of 2% mortgages), further dropping prices.
You can't even remortgage onto a new fix if you're unlucky because the crash wipes out your equity, and you owe more than the property is worth, and in the UK you can't even simply hand the keys back.
London average prices went from £80k for an average house price in Jan 1990 and did drop, to £65k by 1992, down 18%. It had recovered to £80k by 1996, and reached £128k by December 1999.
Prices continued to increase until 2008 when they reached a high of £298k in October 2007, before dropping back to £245k, another 18% drop. Prices had recovered to their 2007 peak 5 years later, by April 2012, then continued to inflate up £487k in August 2017, where they've been relatively flat, only increasing 8% in the last 4 years.
Over that 27 year period house prices increased an average 6.5% per year, with most of that 'value' going to those who leveraged their equity and bought properties to rent out in the late 90s and early 00s. That house price inflation wasn't driven from QE though, but from increased ability for people to pay (partly lower interest rates, but mainly because of increased amount of household budget being available to pay rent as more and more families have two full time working professionals, and younger people live in more and more crowded house shares)
It is reasonable to assert that current asset inflation is due to concentration of wealth generally and COVID stimulation specifically.
Generally as the rich get richer they run out of consumption opportunities and must put money somewhere. They buy assets and drive up the prices.
Here (Aotearoa) COVID stimulation was not given to banks, but consumption opportunities for anybody with money have decreased, hence asset inflation.
We can expect a "correction" if history is anything to go by. It could be a crash (like 1929 or 2008) more likely stagnation in prices and inflation in other sectors (as in the 1970s and 1990s here)
You can't even remortgage onto a new fix if you're unlucky because the crash wipes out your equity, and you owe more than the property is worth, and in the UK you can't even simply hand the keys back.
London average prices went from £80k for an average house price in Jan 1990 and did drop, to £65k by 1992, down 18%. It had recovered to £80k by 1996, and reached £128k by December 1999.
Prices continued to increase until 2008 when they reached a high of £298k in October 2007, before dropping back to £245k, another 18% drop. Prices had recovered to their 2007 peak 5 years later, by April 2012, then continued to inflate up £487k in August 2017, where they've been relatively flat, only increasing 8% in the last 4 years.
Over that 27 year period house prices increased an average 6.5% per year, with most of that 'value' going to those who leveraged their equity and bought properties to rent out in the late 90s and early 00s. That house price inflation wasn't driven from QE though, but from increased ability for people to pay (partly lower interest rates, but mainly because of increased amount of household budget being available to pay rent as more and more families have two full time working professionals, and younger people live in more and more crowded house shares)
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