Aston Lau

Now They Tell Us: Experts Say Housing Is A Lousy Investment And Always Will Be

From this Yahoo Finance article:

Well, the experts are weighing in again. And, once again, they agree: Housing is a lousy investment. And it always will be.

But wait. Just a few years ago, weren’t the experts saying that housing was always a great investment? That house prices would always go up?

Yes, they were.

One thing you can be sure of with respect to market punditry is that experts will extrapolate recent trends into the hereafter. As will most people, actually. That’s why, no matter how many times markets overshoot, people get burned.

Betting against the Canadian real estate market

From this Investopedia article:

So, how can individual investors best-position themselves in the face of this potential upcoming housing bust – aside from not buying Canadian real estate, of course? This is where it gets a little different from the U.S. story.

Since CMHC is directly owned and operated by the Canadian government, there is no opportunity to short-sell CMHC or bet against it in the same way John Paulson profited immensely by betting on the demise of Fannie Mae and Freddie Mac. And since CMHC’s toxic MBSs are guaranteed by Canadian taxpayers and are not on the books of Canadian banks, short-selling the banks or MBS investors is a dead-end as well.

For the typical individual investor, the best opportunities are probably to be found in short-selling Canadian REITs….

Interesting advice.  If I actually had any money to invest, this would be something I’d love to try.