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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (99173)	1/6/2008 5:59:26 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

There is no law of economics which requires GDP to rise with population, but real estate prices do rise and fall with GDP. This relationship only changes when people change their preferences as to which assets they want to hold their wealth. The income tax changed this preference toward real estate due to the many tax subsidies. Waves of penniless immigrants crossing the border does not create a massive rise in real estate prices - even if it doubles the population. But it does create situations where six families live in a one family dwelling. Australia experienced this after WW-II when they tripled their population with penniless war refugees from Europe. Now waves of immigrants dragging their heavy sacks of money across the border are a different matter altogether - but we haven't seen that for a while. Well, we did see that in Vancouver when wealthy people from Hong Kong hedged their bets before the hand-over. You've been following the "Population - Red Herring". Follow the money and real estate will suddenly make sense rather than being a mystery. Its economics. .