 Good day fellow investors. We are always discussing the stock market overvalued. Is it too extreme or whatever? However, it's very important to also keep an eye on what's going on in the real estate market. Is it overvalued? Are there a lot of bubbles? Because everything that happens in the real estate market will have extreme repercussions on whatever happens in the economy and especially on the stock market. So let's dig into the real estate market globally to see what's going on. Perhaps you'll even find interesting investment ideas. The UPS Global Real Estate Index shows a lot of bubbles, especially in Canada, Sweden, Munich, Australia, London, Hong Kong and of course the Netherlands and Amsterdam. Paris a little bit less and cities that are not in a bubble are cities like Boston, New York, Milan and Chicago that's always not in a bubble. Here you can see the infographic from a global perspective. So the more you go to the north the higher bubbles and Hong Kong and Sydney of course. Cheap Singapore, Milan, Boston, New York that is in relation to the average highly skilled worker income salary for that city. For example in Milan you need to work only 5.7 years to afford a 60 meter flat which represents the best value in Europe. So if you want real estate check out Milan. For example 70 square apartment in Milan 170 000 euros around 200 000 dollars. This in Amsterdam would be at least double. Going on to prices in Amsterdam check this out. In 2008 average prices were 261 000 and close to the average for the Netherlands. Then the crisis came and they started dropping dropping dropping they were dropping until 2014 when they reached the bottom and then the huge inventory started to go and only when prices started increasing then people rushed to buy real estate and now you can see the discrepancy between Amsterdam and the rest of the Netherlands. Is it a bubble? Unfortunately we can never know that because if prices keep going up it won't be a bubble. If prices crash then everybody will be saying it's a bubble. Quick example the price when a house that's 20 kilometers from Amsterdam sold in February 2017. The new owners repainted the house just that put in new floors that's very cheap laminate floors and they are now selling it for 30 percent more. You can see the price it just came online. So it's very interesting how in just a year prices have exploded. Is it a bubble? Well that's very difficult to answer but it can have huge repercussions on the economy and microeconomics and that's what we are going to look now. If you look at real estate prices they have increased 30 percent in just a year. However European inflation rate is just at 1.5 percent. This means that inflation is measured wrongly because a lot of young people have 40-40 percent of their income going for housing and that's not measured here. So of course oil prices dropped means prices of a lot of things dropped but the income that goes for housing is very very high and with higher prices it all then boils down to the interest rate. In the Netherlands and in Europe interest rates have really fallen thanks to the ECB and there isn't much difference if you take a loan now and two years ago in what you pay per month. However this means that the ECB will never be able to increase those interest rates because a lot of those mortgage payments will increase significantly. That will lead to people being unable to pay and perhaps even to real estate market collapse that will disseminate disaster across Europe. So from this perspective from the real estate perspective I really think that the ECB will not be allowed to increase interest rates. There is a catch. If inflation comes and they are forced to increase interest rates while wages don't increase then we are in trouble. So what is boiling is a very very delicate situation that will slip out of control. It's impossible to control these forces. We'll see how it ends up. However there is a bubble. It will probably be called the ECB bubble. The quantitative easing bubble when it will burst as soon as somebody loses control and we'll see what happens. Perhaps even house prices will continue to rise because there will be inflation so you never know but try to keep an eye on it. There is plenty of liquidity so see where to buy what. If you have an expensive apartment in Amsterdam and the rent is the same in my land you might want to switch. Looking forward to your comments. What do you think about what will happen? Share it with us. Thank you for watching. Click like and I'll see you in the next video.