The Housing Bubble Will Be The Grandest of All Bubbles
Ask anyone and they will tell you that one of the safest investments is real estate and/or property. Even the most inexperienced of investors choose to put some of their capital in land, apartments, houses. It has made the most sense up for the most part of human history since humans tend to live in crowded areas and their numbers where increasing. It was a matter of simple math really.
Right now the housing market bubble is prime to pop in most countries. Major cities in Canada, Australia, Britain, Germany, United States, Denmark are sitting on ridiculous valuations. This is literally buying the top over and over again with no end in sight.
The interesting part is that people diversify to real estate because stocks are overbought and really, every other market seems to be in its own bubble. So besides bonds, gold and some other traditional hedges real estate gets all the attention when it comes to shielding against the Domino effect of an impending global economic collapse.
Most people will get burned by trying to play it safe and the reason is simple. The world population has had its peak. As time goes by the world population will decrease. People will not tolerate to live as roommates in crowded apartments while their salaries remain the same. Housing starts to resemble jail blocks and this is not going to go for long.
The internet provides the opportunity of ditching the office space and that means people can live in the country and still take part in the world economy that hubs under major densely populated cities. The old money has not accounted for this and they are about to get a tough lesson about black swans in what is considered one of the most safe of traditional investments. A piece of land or a building could be very valuable due to its actual proximity from certain attractions and economic activities. Not anymore. Technology replaces all that. Is just most people haven't realized this yet. When they do the effects will ripple across our entire economic fabric.
Sell high, buy low....... real estate is buying high and then POP you're under water when all this goes down. I saw something on world population somewhere that said that if you built 4 bedroom houses close together(and I forget the actual dimensions per house but you'll get the gist) and put the whole world population in 4's in each house that everyone would fit inside the State of Texas? I'll try and find it but it's been a while. I thought that was very interesting based on "over populated" world figures. We also hear all the time how the world can't provide for the population? That's all based on us fighting for everything all the time IMO and more so on the currencies around the world that are involved in everything. The world can more than supply the needs for all the people and many more if only we changed our ways and worked together but greed and control has been around for a very long time unfortunately. Sorry for the rant....... back to the matter at hand..... buying a house fight now may hurt you unless you love it and plan on being there for a long time. Me, unless I found my dream home, I'd rent and wait till prices come down.
Real estate is not a good investment today because of the bubble unless you have the construction and financial skills to flip houses on the cheep.
The arguments hold, and true that earth population is stagnating everywhere, exept for Africa. So housing bubble is more likely in the developed world. But here comes the increased mobility of the people. People are traveling more and more ... and more property is on booking etc... and probably the housing bubble is going to be a slow process
I do agree house bubbles are created, however, I actually think in most western countries, more houses and apartment are needed. Although the population maybe decreasing, the number of householders is still increasing quite a lot. This is due to the fact more and more people will be without a relationship, will want to have their own place, student wanting to live not with their parents anymore, people getting older and older, the immigrants we so desperately need to keep our economies running. Therefore, it'll probably take some time before the bubble is at its peak and start the inflate.
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