You know I hear this all the time but it never quite makes sense to me. REA is inherently a better asset class than the vast majority of assets, simply because you can leverage up without a risk of being stopped out.
Doing the numbers on (most) developed economies, buying freehold housing is typically a worse investment than stocks before leverage, but after, RE almost always comes ahead. Nobody is going to let you mortgage a basket of stocks, but almost any bank will let you do that with a house.
That said - I hate this idea because I think this kind of thinking is what has lead to many of societies problems in the developed world at the moment. But, from a rational point of view the numbers make sense.
It's worse than that. Buying a house without leverage is a terrible investment.
The leverage is absolutely required because all the fees that come with real estate (Realtors, Interest, HOA, Taxes, Insurances, Closing costs, Downpayment opportunity cost,...). The leverage makes it an OK investment, but still historically not on the level of a diversified basket of stocks.
The leverage also works in both ways and essentially makes your house an even more risky asset. It supposes that it only ever goes up which has not always been the case historically.
Doing the numbers on (most) developed economies, buying freehold housing is typically a worse investment than stocks before leverage, but after, RE almost always comes ahead. Nobody is going to let you mortgage a basket of stocks, but almost any bank will let you do that with a house.
That said - I hate this idea because I think this kind of thinking is what has lead to many of societies problems in the developed world at the moment. But, from a rational point of view the numbers make sense.