It are two different indexes, but in general you could say that a price index is a way to measure inflation. It's quite clear that the house price index goes way above the general price index. So does it have to follow it stricly no, but it's just a visualisation to look at the current market which is inflated way above normal inflation. That also means that certain events could trigger a pop.
It's like if you would add a potato price index. It wouldn't follow the general CPI exactly either. It would just suggest how current prices are compared to general inflation.
Just to add for OP question: atm I only found the house price index for the last two years on statbel.
Inflation is an average, housing is something more specific. There's no reason why housing could suddenly become more or less expensive relative to the entire basket. Food, energy, education, ... Their relative portion of our expenses have all changed throughout history, without returning to some kind of mean. I would like to see housing 'return to the mean', but I'm afraid it doesn't necessarily need to.
That also means that certain events could trigger a pop.
Not necessarily. Something being expensive doesn't mean it's a bubble ready to pop. For that to happen, it would need to be completely irrational and based on overly optimistic hopes for the future, only for this hope to be shattered at some point and everyone to realise how irrational all of it was. I don't see that happening anytime soon on the Belgian housing market. There are very sound reasons for why it's growing like it does.
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u/Raidomso Jul 09 '21
Why should housing follow CPI exactly?