Ok - downpayment on a house of 50k, 90% LTV. Must be 500K. Doubles in price to $1mm. Let's say it does this in 10 years. Wages haven't appreciated much. Where does that 500k come from? The next generation.
Zero sum game. Rampant inequality. Crashing social mobility.
As you say it's not merit based. How many people can save 500k in 10 years? Leveraged mortgage debt then becomes the only game in town. Game set and match the banks.
1. Debt - someone pushes a few buttons on a computer keyboard and "poof", you've conjured a million dollars out of thin air
2. China - this is real money, but if it gets pointed at one geographical region, it can cause major distortions, especially if that real money can be confiscated at the whim of the politician who happens to be in power at the moment
No - we are seeing an increase in credit but not wages. Asset prices are running ahead of wealth creation so the young must pledge to work for longer for the same pile of bricks (and land).
Yes there is foreign money but still most buying is domestic. Foreign money is a convenient bogey man. It's the same in Canada and the stats do not bear it out.
Zero sum game. Rampant inequality. Crashing social mobility.
As you say it's not merit based. How many people can save 500k in 10 years? Leveraged mortgage debt then becomes the only game in town. Game set and match the banks.