Yes, Pinto, many old guard investors (generally speaking) are leaving the RE market due to poor returns and costly, restrictive government intervention. But a new cohort of younger (innocent) investors are stepping in to buy; lured by high rents, house flipping shows on the box, the
expected? potential of capital appreciation and pure FOMO. Too early yet to speculate as to the balance of investment sellers being matched by buyers.
First home buyers (FHB) are still in the market though; first because rental supply is severely diminished, and second because rents are so high, and rising, that buying presents a more secure option. I'm noticing that this dynamic is now taking shape with FHB's increased buying of units, which has lagged stand-alone homes in value by circa 20% - so more affordable for FHB's. Seems that the (high) risk of shoddy workmanship is now a secondary consideration - what could go wrong
. It is also worth mentioning that many of the young FHB's and the new cohort of young investors are making significant incomes due to the new paradigm of non-traditional incomes derived from their cyber space machines (sales/marketing to the world with a touch of a button).
As for existing homeowners, consider that circa 50% of the residential market have no mortgage or a high level of equity and are still comfortably trading in and out with little or no financial constraints - creating a circular primary market and the tale of two cities.
In any case, regardless of the above dynamics, while employment remains strong and the demand for homes outstrips supply (possibly for the next 5/10 years, given the severity), then I expect the residential market to remain...robust - notwithstanding the future unknowns. As it stands the government is in between a rock and a hard place; a monumental housing crisis exacerbated by a diminished supply that they nor the private sector can remedy for a host of reasons, at least in the near term. And sadly, that heralds the increase of homelessness, tent cities, desperation and crime -
America here we come.
