[0xfaded]

Could you please explain your thoughts on this? My current operating philosophy on real estate prices are that inflation is demand driven (buyer purchasing power), and that individuals are already maxed out (40 year mortgages, rents 50% of income). The only reason I can see real estate continuing its climb is if government policy continues to insist that home prices can never depreciate. If that plays true, then sure, you get your 4%. But it feels like a ponzi scheme waiting to collapse.

[nikitaga]

(not the GP)

> government policy continues to insist that home prices can never depreciate

Those policies are for old people cashing out, rich people buying investment properties, and even richer people who own real estate developers. What do you think are the odds that in... let's say 5 years, either of these groups will have less weight in public policy making than they do today? I think it's very, very close to zero.

In markets like Canada, lack of government investment in small towns, NIMBYism preventing density, and high rates of immigration, mostly to big cities where the jobs are, put consistent upwards pressure on real estate prices despite the end result sucking people dry. I think we'll sooner see negative interest rates to prop up further spending than a government willing to address this crisis head on.

[totony]

Agreed, fixing real estate crisis is taking money away from the main wealth storage of most people. Apart from a catastrophe I don't see the elected officials do anything about it.

[rdtwo]

Real estate can climb for a number of reason. Either a shortage of housing, falling interest rates or just pure inflation. If you can somehow tap into really low rates, even if the house drops a bit in value you can extract enough rent to cover holding cost and then if you just match real (government inflation number is a lie imo) inflation with no growth you would be already be at 4%