Buying a property on a 3% or 4% yield versus interest costs of (say) 7% strikes me as being a bet that prices will continue to rise ahead of wages or inflation over the long term.
Properties aren't cheap on any metric right now, and long term studies (Schiller, Herengracht Index) suggest that prices track wages, so I don't think that the odds are against such an investment.
That said, I'll probably be proven wrong by prices in Melbourne (given Satanoperca's examples) rising by 10% per year for the next decade.
Properties aren't cheap on any metric right now, and long term studies (Schiller, Herengracht Index) suggest that prices track wages, so I don't think that the odds are against such an investment.
That said, I'll probably be proven wrong by prices in Melbourne (given Satanoperca's examples) rising by 10% per year for the next decade.