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The myth of real estate being a great investment is mostly a result of mathematical illiteracy about compound growth
Even these gains in real estate could only have happened under the old model of real estate investment. No longer.
There are perhaps five sources of gains in the price of a given property, and the final profit is a product of these
First, the original change in usage of a piece of land from agricultural or barren to residential or commercial.
Second, the development of physical infrastructure which makes this land usable for the new purpose.
Third, the improvement in livability or commercial viability as the area becomes more and more populated.
Fourth, the periodic booms and busts that afflict real estate
Fifth, the general inflation of the economy that becomes part of the visible change in the property's price.
Our parents' generation bought property at an early stage. So all the gains from the 2nd to 5th point accrued to them over 2 or 3 decades.
Now, you typically buy an apartment from a real estate developer, and all gains from stage one to three accrue to him.
What is worse is that the developer also tries to capture much of the value of the later stages in advance from the buyer, and succeeds
Therefore, it's only logical that savers should buy only one house, the one in which they are going to live.
If your lifestyle and family require many houses, then that's fine, but don't consider it to be an investment.
