[quote=FlyerInHi][quote=Jazzman]
My view is that RE has been highjacked in many places and these places share things in common. They tend to be English or Asian speaking, major metropolitan conurbations, with an industry that drives it and a government that accommodates it. In other words, a culture has been built up around it. [/quote]

You’re on to something… but when will it all unravel?

If you’re mobile and retired, then you have more choices… But what if you must live in London or Hong Kong? Your only choice is to live in a closet.[/quote]

Yes, that is right and I make that point. My view is rent is a better all round choice. If listings are still only 50% of what they were in peak times, then choice, or lack thereof, alone would be an incentive to wait. On the other hand, there must be a good choice of rentals now.

When will it unravel? Everyone is terrified of trying to answer that question. Nobody wants to look stupid. There is huge vested interest in not letting it unravel, and many talk of the new normal; low rates, high price earnings etc and I’ll admit you don’t hear many convincing arguments to oppose this view. But that doesn’t mean there aren’t any. It might just mean we don’t know what the causes will be. Pure psychology, insurers suffering prolonged low rates, Grexit, Ukraine/Nato escalation, bond bubble, China housing/stock market crash, inflation/sharp rate rise, or something else we haven’t been keeping an eye on. However, to capitulate to forces when you know them to be wrong will not serve you well in life. If markets continue to climb, or even settle at current levels and you remain ‘priced-out’, you cannot blame yourself. You used the information available to you and made a rational choice. You are a normal, sensible human being. Strike that, You are a smart individual.

One final point I would make is that we have become accustomed to comparing current valuations with the bubble. After a tsunami a 20′ swell might seem like a ripple. The bubble was an extraordinary event. If it hadn’t happened, and we still found ourselves where we are today, would we be yelling “crazy bubble'” prices? I think we might very well be.