[_carbyau_]

Agreed. By definition a "good investment" goes up more than inflation.

Do you want houses to keep going up more than inflation?

If no, then they can't be a "good investment".

The crazy thing here is people complain about their economy slumping. Imagine what would happen if we didn't have all this money going into houses... the money won't disappear. It will go somewhere in search of "good investment".

[oceanplexian]

A good investment does not need to go up more than inflation, technically speaking.

If you’re using leverage and the cost of that leverage is lower than the cost of inflation (The case with US mortgage rates) you will come out ahead even if the property only keeps pace with inflation. Even if the interest rate on your debt is the same as inflation, mortgage payments are calculated using simple interest while inflation is compounding. That’s not even getting into taxes which can shift the calculus further in your favor.

Unfortunately, this can all be very non intuitive but RE is one of the best investments out there. You can’t get margin called, the government is heavily subsidizing the loans and there are endless protections (Can’t lose your primary residence in a bankruptcy, mortgage forbearance, etc ) you’d have to be crazy to rent if you have the option not to.

[inglor_cz]

People stuff money into bricks and mortar precisely because they consider other investments even worse. There isn't a great deal of optimism in the market right now, which contributes to the slump. People are being defensive.

Looking at my own country, I cannot really pinpoint any single corporation I would trust to grow a lot in the 20s. Peeerhaps Avast, maybe.

And looking at the recent Chinese governmental heavy-handed social engineering and crackdowns, I expect rich Chinese to start investing their money outside China even more furiously than until today.

[mchusma]

Agree with this. You can want housing to be affordable or a good investment. It basically can't be both.