Historically house prices have risen enormously and a whole lot of people have made money, so everyone believes this will continue forever despite a huge political movement behind building more houses and other (good) policies that will reduce prices. On the linked page I typed in "-20%" into the annual appreciation field and lost $717,000.
Interestingly though 30% of people buying houses now in the UK are not getting mortgages (in some areas much more than that [1]) and I assume most of these will be the types of investors who are looking to buy a second home to rent out.
[1] https://www.thisismoney.co.uk/money/mortgageshome/article-63...
Borrowing to buy a house at 4.5% you might think, "Not much risk, will likely appreciate faster." Borrowing to buy stocks at 10% and you're almost certainly not going to come out ahead.
(Maybe my broker has terrible rates, others could be more reasonable.)
Though maybe LEAPS (and for indexes, futures) are a still cheaper way to get leverage.
Edit: goodness, the rates on some of those currencies is less than the dividend yield of those countries' indexes... If I don't expect New Zealand to sink into the sea, is it stupid not to borrow NZD and invest in the NZ top 50?
IIRC, last time I looked at margin out of curiosity with my brokerage firm (schwabs/2014), I also remember to be around 10%.
I can’t help but think we are living in a unattainable economic environment...
My subjetive experience in the USA (Seattle and NYC) is that you can get 4-5% with a steady job and 20% down for primary residence. Anything out of ordinary, like 2nd mortgage (since we are talking about real state as investment), the interest rate goes up (6-7% last time I applied for one).
Also, while the margin rates can be higher, there is more liquidity, smaller transaction costs, and much smaller fees.
Transaction costs are a big one. In some countries there's stamp duty, in the US there are unusually high closing costs (6%?). That said, the bigger the investment the longer I want to hold it, and those transaction fees aren't as steep when amortised over the home-onwership term.
You know the same thing applies to stocks and shares. And in fact stocks and shares have risen more historically [1]
Shares also have liquidity, you can easily sell them in part or whole. You can diversify. One incident could easily destroy a house, if it destroys your well diversified stock investments you've probably got other problems.
So agreed the stock market is the better investment, but as we can't see the future, both are based on past performance. Yes there are headwinds, there always are, I can think of many many reasons why stocks could fall, that doesn't really change what has happened historically though.
Of course the beauty of investing is that if you disagree you can put your money where your mouth is :)
[1] https://www.investopedia.com/ask/answers/052015/which-has-pe...
buying a house to live is not an investment, and i should think that people ought not to treat it as such. Buying a house gives you stability and security for shelter. It's quite possible that renting is cheaper, but you also can't do certain things while renting - such as small renovations (some places don't even let you nail a painting on to the wall).
Investments in real estate is a different ballgame to buying your home.
That said, buying a house is basically buying an index linked annuity that covers your rent on a property you have to maintain. So it is an investment, albeit one tied up with a lot of other baggage.
I'm happier living in a house than an apartment but my house is a place to live, and an item of value, but not an investment I expect to make profit from.
(according to random site on the internet, it's a little below inflation: https://www.in2013dollars.com/2002-dollars-in-2018?amount=30... )