I've been looking at the local real estate market for quite some time. People are buying like crazy. Less and less of them are choosing to hold money in the banks and everyone is telling me to buy real estate. This seems to be the dream of every young and old, to have a portfolio of apartments for rent. Who is going to live in your apartment when everyone around you starts to own a spare one? There's not enough people coming to towns to satisfy the market.
At the same time companies are building more and more. There's flats and houses for sale everywhere and new ones are cheaper than the old ones. Why? Because people bought them years ago for e.g. 100k USD and then invested another 20k into remodelling and furnishing. They would like to get at least 100k back, but developers are pumping cheap new flats for 90k now, who's going to buy a used, older one for 100?
These sellers are now waiting because they think it will normalize, but it won't because new ones are still built.
In a couple years people will start lowering the prices of old properties to be able to sell at all and developers will run out of options, because they are building on credit, they have to keep selling. The real estate bubble will have to burst, it's inevitable.
Are you noticing the same pattern around you where every person is trying to save up for a house to rent or buy cheap, remodel and sell with a profit (so called swaps)?
Over here, the same thing is happening that the only achievement that is worthy of celebrating as a young man or woman is when you have a form of real estate investment to your name whether land or building to the extent that when you buy a car as a result of necessity before owning a property, you must be a foolish man. This your observation is a very valid one in that here, we have housing deficit and at the same time, there are empty apartments all over the place in certain areas of the country because of the cost of building and investor want to earn their returns faster and move on to something else. Eventually, it is the cabals who are in charge of sale of lands and building materials get to win at the end.
However, its good to invest in real estate but one needs to be strategic about it. Development happens, cities move, a business centre today can be a deserted environment tomorrow but in the midst of all this, some cities would continue to be in existence and those are the areas that would always turn out returns on investment and even when there is a bubble, it won't burst because as the city continues to grow, the need for housing becomes a necessity for countries that are in the peak of their development process.