House prices are rising, is this good?

For those who own houses, and especially for those who are living with negative equity, this will improve their wealth to debt ratio. House builders will also see a promise of demand rising at last.

Higher house prices are not so attractive to those on low incomes who are struggling to get their feet on the housing ladder. They are also dangerous in that the last (private) credit boom prices seemed to be stimulated by rising asset prices which gave a false sense of well-being.

From the community's point of view, the housing shortage which led to housing price inflation also led to affordable housing becoming unaffordable.

We need a housing market not overheated by a credit boom and low interest rates, and not so controlled that the market cannot find an equilibrium price in every sector. In this was there would be reasonable prices for starter/affordable homes, which cover the cost of building and land, and equilibrium prices in all sectors.

Are rising house prices a good? Yes, if they are not rising rapidly in a credit boom, and if in each sector the market is allowed to find its level.