Quote:
Originally Posted by Barry-xlovecam
Everyone lost equity in RE in 2008 ...
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And there's nothing worse than paying off a mortgage on a property you've already sold (ie negative equity). It just amazes me how many people don't understand this very simple concept.
Basically real estate, in most countries, right now is in a bubble.
The other guy mentioned Vancouver. The property market there has been collapsing and the all the speculators (mainly Chinese money) have shifted their attention to Toronto where another bubble is developing.
What people don't realise is that real estate world wide is in a complete bubble funded QE and a very low cost of borrowing in the MAJORS (UK, US, EU etc) not to mention shadow banking in China where, many of my friends in China are involved in the shadow loans industry in one form or another.
Now WOJ says long term real estate is fine. Sure thing, real estate is a good play, a hard asset and it always will outperform inflation so if you're cash down and you don't need to get leveraged to the hilt then fine because maybe you're not bothered if the value falls.
However, at this point in the cycle I would stay away from it. Not to mention that with all the banking issues of the last few weeks, things are beginning to look like 2008 all over again. This is the best time on earth to be in cash right now because almost everything is in a bubble and when it pops, there'll be bargains for those with dry powder at hand.