You have to factor in the time cost of the capital employed. If it's not appreciating then chances are you have a better use for that money.

I would also be wary of the latest scandal which could be very serious regarding "forclosure mills" and "robosigning". Essentially it means that, because of the sub prime crisis it is very hard to prove ownership of a property and you could end up buying somewhere that actually belongs to someone else.

"The banks are screwed—again. Because of the same thing as the last time—the ****ing Mortgage Backed Securities. People still haven’t figured out what this Mortgage Mess means—but I’ll tell you: If enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loan and keep their house, scott-free? Shit, that’s basically a license to halt payments right the **** now. That’s basically a license to tell the banks to **** off. This Mortgage Mess is a hurricane that'll make Lehman's collapse look like a spring rain."

http://www.zerohedge.com/article/gon...s-death-spiral

Leaving aside everything else, why on earth would you want to purchase real estate in a country where you are not a citizen/PR?

Also, even if you were a US citizen (living in Australia), how can you get to know whether a property is genuinely a good purchase without being familiar with the area?

If it were a decent investment in a market with a robust rental market (like NYC, Boston, SF etc), why not? But speculating in a place where not only do you not want to live if it all goes pear-shaped but can't live is a bad idea imo.

FWIW, I figured investing in Dubai property was a bad idea when a 25 y.o. girl in my office "got in on the action" and bought a little unit in a new development that wasn't even close to the water...

With only $40k he's not going to be able to buy in NYC, Boston or SF.

Indeed. You need $500k for anything decent in San Francisco. Prices only came off around 10-15% in this city. Fringe suburbs of the bay area on the other hand halved in value...and with good reason!

Maybe with the help of a reputable real state agent?

I am not saying I am definitely going to do it. I only brought it up so that I know other people idea about it. Because it seems to be a good investment anyway. Someday the most powerful economy of the world will back on it's feet again and that's when the house prices will go up.

But how are you going to know if your real estate agent is reputable if you aren't there?

It won't happen for at least a generation.

Your link was most illuminating: it brings the real horror of what's been going on in the mortgage field in the US into stark focus.

Well, quite.

But there isn't a single real estate market in the US, there are hundreds. The US economy as a whole could be doing great but a specific house's value might never go up.

If all you wanted to do was invest $40,000 in the US real estate sector, then you could always just plonk it in a unit trust.