Hi aa+, are you also known as aa*?😀
Your friend might be right, who knows. I don’t think anyone can really predict the short term movement, but one thing is very likely to be true - this round of correction was indeed triggered by government’s policy on lending. People used to borrow as much as more than 10 times against their income, they can now borrow 6x only.
But the economic difference between real estate and other investments, is that if credit goes down, real estate demand doesn't disappear - it just shifts from demand to purchase property, to demand to rent property.
Property is both shelter and accommodation, and therefore we are either renting or buying. And when regulators suppress acquisition demand, they are therefore stimulating rental demand. The demand shifts rather than disappears. This re-weighting of yields is how real estate markets self stabilise in situations where populations are growing.
We simply don’t know the future, but we should think ahead what to do under different scenarios. My original plan is to stop my AU journey after I settle the last batches by end of this year and look for another place to develop my third pillar, but if the market drops more than 10%, I will give it another go.
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