I agree that investment in an already very overvalued property market is unwise (except perhaps as part of a diversified strategy..?). Unfortunately, the capita

I agree that investment in an already very overvalued property market is unwise (except perhaps as part of a diversified strategy..?). Unfortunately, the capital gains tax status of real estate in NZ, and the leverage on your deposit (the bank charges 5% interest, you make 30% gains) and fast-rising real estate prices made and still makes it favorable to pay the 6%, rather than investing in the stock market, for example. This further inflates real estate prices as a speculative asset until you end up in a dangerous bubble that is difficult to escape from. In a sane system, this wouldn't be the case. It's a problem the NZ government has repeatedly failed to solve, presumably because it would be politically risky. Instead it appears we've chosen by inaction to continue the course toward a real estate collapse. I guess perhaps then we'll learn hard lessons about diversification and tail risk..