“Recently we hosted a meal at our home with 3 young couples present. The topic of real estate came up. One couple recently spent $900,000 on an East Van house. When someone referred to my bearish outlook the male owner of that home, who also owns a downtown condo, brought up a couple of classic arguments:
• even if this is a peak, real estate is still a good investment in the long term, just like the stock market.
• Vancouver is different.”
- b5baxter at vancouvercondo.info 30 Mar 2012 2:36pm, who also adds analysis.
Real estate is only sometimes “a good investment in the long term”.
Buying (or holding) when it is historically overvalued is a certain recipe for underperformance.
Holding more than your personal residence, with leverage, through a downswing, is a recipe for crippling punishment.