why not to invest in property, page-4

Rebel,

If people cannot justify buying a home because interest rates make the price too high then they either stay at home with Mum and Dad or they rent.

If interest rates are high then some property investors look for another asset class to invest in (probably cash if interest rates are that high).

If property investors are not buying properties to provide for rent then renters (ever on the increase) must compete for what is available for rent and therefore rents will rise (this is what we are seeing right now).

If rents are increasing then the cost to investors is dropping and it becomes more attractive to buy property and eventually, as they compete for properties, they push prices up.

Interweaved amongst all this is the fluctuation of interest rates are demand for money fluctuates and various economies are kick started or throttled.

The only thing I can see changing all this is if we have social changes where we see more people per household. For the past 30 or 40 years we have seen the opposite trend but you never know what is around the corner.

Me, I know that we "know" nothing, nothing is certain. All we can do is assess risk and take action on a guess.

My own life experience and the history available to me from books etc teaches me that land is an asset class that is reasonably low risk and given enough of a time scale is reasonably sure of increasing my wealth.

I don't see any crash coming in residential property.