What are investors buying that is perpetuating investments into the housing and rental markets?

[Aisone]

It should be obvious.

Too most folks, RE has always been the best path to wealth. I have even heard top level investment executives echo this. Outside the US, no other asset class comes close as their financial markets are trash and currency, unreliable.

The idea is ingrained. With too much free money, liquidity and a lack of return on safe investments, what else could have possibly happened?

Typically it's been a balance between the stock market and the bond market. We've had bear markets before, but this surge in real estate purchasing is phenomenal and to this degree, shouldn't be 'obvious' by any stretch. And it's going to (and likely has) fed more and more private investment, perpetuating and probably accelerating the game.

Affordable homes and rentals are absolutely essential for local communities, and the day that these in large part simply become the latest investment game for the rich, we are eventually going to see a dramatically negative societal impact like we've never seen before [imho].

 

[xandman]

Typically it's been a balance between the stock market and the bond market. We've had bear markets before, but this surge in real estate purchasing is phenomenal and to this degree, shouldn't be 'obvious' by any stretch. And it's going to (and likely has) fed more and more private investment, perpetuating and probably accelerating the game.

Affordable homes and rentals are absolutely essential for local communities, and the day that these in large part simply become the latest investment game for the rich, we are eventually going to see a dramatically negative societal impact like we've never seen before [imho].

Inspite of the 20%+ for the last 3 years and record balances in the stock market, where do you think most people would want to put their money? Something to ponder.

 

[Aisone]

Makes no difference whether a corporate entity owns those properties or individuals own multiple of them for investment purposes.

The moment housing was allowed to be taken as a speculative investment instrument is when the downside started. That was a long time ago.

Theoretically it doesn't matter who owns the properties, but it matters the scale that they own them. Scale to this degree has never been seen before and is dramatically shaping living costs around the country.

 

[M.W.]

So, you got your answers from several posters. Hedge funds and private equity are buying at record pace. It's a disgrace this happens but as I said this started a long time ago when individuals were allowed to own multiple properties.

Life would be so much better if

1) cities provided only the following : utilities, health care, policing, fire, education. Now a small city like Vancouver runs over 1000 social programs alone, the city would he instantly bankrupt if property prices normalized and were cut in half. The city would simply not earn enough in property taxes. Hence, cities don't really have an incentive to limit speculation.

2) nobody was allowed to own more than one property. Properties are for habitation purposes and should never be used speculatively. They provide the living base of our future generation. Also property gains should be fully taxed upon sale. A property should never be an instrument to rely on for return generation.

I am a property owner and strongly advocate for the above. I gladly pay property appreciation tax should I ever sell if that makes it into law and enables younger generations to get their own home.

Theoretically it doesn't matter who owns the properties, but it matters the scale that they own them. Scale to this degree has never been seen before and is dramatically shaping living costs around the country.

 

[Aisone]

Inspite of the 20%+ for the last 3 years and record balances in the stock market, where do you think most people would want to put their money? Something to ponder.

In general, real estate is not such a great investment during a down market, which tends to come during recession times (of which I claim to be no expert on.) But regardless of that, currently, real estate looks like an extremely attractive investment as a result of this investment surge that began in the last couple years. So naturally those with the resources will be interested in getting in on this (which is probably becoming a bandwagon now.) But the implications of this are going to be far worse than the real estate bubble. Back then, people lost their homes and simply rented apartments. Now they will even struggle to afford rentals. Huge difference, massive implications.

 

[Aisone]

So, you got your answers from several posters. Hedge funds and private equity are buying at record pace. It's a disgrace this happens but as I said this started a long time ago when individuals were allowed to own multiple properties.

Life would be so much better if

1) cities provided only the following : utilities, health care, policing, fire, education. Now a small city like Vancouver runs over 1000 social programs alone, the city would he instantly bankrupt if property prices normalized and were cut in half. The city would simply not earn enough in property taxes. Hence, cities don't really have an incentive to limit speculation.

2) nobody was allowed to own more than one property. Properties are for habitation purposes and should never be used speculatively. They provide the living base of our future generation. Also property gains should be fully taxed upon sale. A property should never be an instrument to rely on for return generation.

I am a property owner and strongly advocate for the above. I gladly pay property appreciation tax should I ever sell if that makes it into law and enables younger generations to get their own home.

You clearly get it and have considered these issues much longer than I have. I never have thought there would need to have regulation on purchasing homes for investments, but wtf is going to discourage and curb what is currently happening to the scale it has become? And is this just getting started? A homeowner would generally be happy to see their home value increase, but if they have to move and can't find anything cheaper to purchase, their taxes will be that much more expensive on the new home as the increase of their home value. So this effects everyone.

 

[xandman]

In general, real estate is not such a great investment during a down market, which tends to come during recession times (of which I claim to be no expert on.) But regardless of that, currently, real estate looks like an extremely attractive investment as a result of this investment surge that began in the last couple years. So naturally those with the resources will be interested in getting in on this (which is probably becoming a bandwagon now.) But the implications of this are going to be far worse than the real estate bubble. Back then, people lost their homes and simply rented apartments. Now they will even struggle to afford rentals. Huge difference, massive implications.

So, you started the thread with a question only to flesh out your RE investment thesis. Forget I said anything. Respectfully, I fade your trade.

 

[Aisone]

So, you started the thread with a question only to flesh out your RE investment thesis. Forget I said anything.

There is some truth to this, but let's not assume you actually answered the question either. I am still very interested in what the game is, how these are [likely] getting packaged to sell/offer to investors etc. I'd like to know what is at the root of this surge in such scale.

 

[Nine_Ender]

You clearly get it and have considered these issues much longer than I have. I never have thought there would need to have regulation on purchasing homes for investments, but wtf is going to discourage and curb what is currently happening to the scale it has become? And is this just getting started? A homeowner would generally be happy to see their home value increase, but if they have to move and can't find anything cheaper to purchase, their taxes will be that much more expensive on the new home as the increase of their home value. So this effects everyone.

Real estate you live in has always been a great investment. Prices don't impact me at all. If I wanted to sell, there are loads of cheaper homes elsewhere in Canada. Generally the people who complain about real estate feel left out of past windfalls. or are stuck renting which is to some degree lost money long term.

I could refer you to some threads in 2010-2011 where people were legit expecting a crash in real estate in Canada and Australia. What god awful calls they were. Imagine someone uprooting their life because of some grandiose theories from day traders. That would be tragic.

 

[murray t turtle]

RE has generally been a good investment, but of course it has been lately with what seems to be new trillions pouring into it. Those investment numbers are staggering. Rentals used to be where people who couldn't buy a home would turn to. Now with rental prices surging, so many people are going to get priced out decent living options. I wouldn't even be surprised if these new investments are also going into buying mobile home and trailer parks around the country.

%%
Exactly/ +I see more travel trailers, used as a home, where allowed.