Nobody cares if individual buyers get in over their heads and go bankrupt as a result of unwise financial decisions; there is no systemic risk from that. But when the originators then distribute these dodgy debts in the form of opaque structured finance vehicles, THEN the systemic risks are created. If these 95% mortagages stay with their originators (meaning those who provide the purchase money also collect the payments going forward), there shouldn't be a problem for the rest of us to worry much about.
If you thnk it is going to stay w the originators.....
and btw, even if it was staying with the originators, it still is a receipe for disaster...
Negative equity is not a problem if it's your primary home and you're in it for the long term.
The only question is can you ride out a hike in interest rates. That should be your stress test.
If you're worried that you won't be able to sell out if a crisis comes then I advise renting.
For me, I am the same with buying as renting. I can't abide spending the percentage of salary many do on rent. Currently I spend between 10% and 15% of my income on rent.
When I've looked at apartments for purchase I've considered those in the range 2.5m to 3m. I'm very sure most locals would be looking at places 2-3 times that price if they were on my income.
Not sure why I should be punished for what others do! While interest rates are low I've got better things to do with my cash than tie it up in a Hong Kong flat.
Well you've got quite a lot more cash than me! That said, in the last two years I think I've out performed you, relatively speaking that is... I invest my money back into my business and it has been growing steadily.
Put it in your diary and ask me again in two years.
That said, I'd love to buy a place. On the other hand, if I had the cash I'd buy a commercial unit!