Drew this is really hard to know because it has gone both ways before. Japanese homes are deflated and very low value but homes in Taipei are expensive and places are small. You have to be very wealthy to actually own a place. Most are not wealthy. Remember, their currency is called the NTD (New Taiwan Dollar). They needed a new one because the old one hyperinflated. Israel is similar (expensive and have to be considered wealthy to actually own).
The housing prices take a hit when all the debt goes bad but then the central bank prints up a ton more money. Housing is a basket of commodities.
When interest rates go up, the US is over. So they will keep nominal rates down as long as possible. Paul Volcker is dead.
The real threat isn't valuation IMO, but rather mandates on landlords. IF you are buying something for renting out, government might decide that someone needs shelter even if they don't pay you. It happened in Brazil and even here in the US recently. But at some point it could be nearly the law of the land. I would not own property for an investment. I would only own it to live in. Because of the very productive ocean you can easily have a subsistence living in the Bahamas and in fact many of the locals do just that.
But the main thing is to buy things at the right valuation. Silver is very cheap and so is Bahamian property and that is why I own a good deal of each.
Do you think real estate will tank in the Bahamas, and do you think it will tank everywhere in the U.S. or only some places?
ReplyDeleteDrew this is really hard to know because it has gone both ways before. Japanese homes are deflated and very low value but homes in Taipei are expensive and places are small. You have to be very wealthy to actually own a place. Most are not wealthy. Remember, their currency is called the NTD (New Taiwan Dollar). They needed a new one because the old one hyperinflated. Israel is similar (expensive and have to be considered wealthy to actually own).
ReplyDeleteThe housing prices take a hit when all the debt goes bad but then the central bank prints up a ton more money. Housing is a basket of commodities.
When interest rates go up, the US is over. So they will keep nominal rates down as long as possible. Paul Volcker is dead.
The real threat isn't valuation IMO, but rather mandates on landlords. IF you are buying something for renting out, government might decide that someone needs shelter even if they don't pay you. It happened in Brazil and even here in the US recently. But at some point it could be nearly the law of the land. I would not own property for an investment. I would only own it to live in. Because of the very productive ocean you can easily have a subsistence living in the Bahamas and in fact many of the locals do just that.
But the main thing is to buy things at the right valuation. Silver is very cheap and so is Bahamian property and that is why I own a good deal of each.