I'm in Toronto, Canada. We're one of the frothiest cities in the world, if you don't want to specuvest for appreciation, you don't buy real estate and you haven't for 15 years.
It's easy to say don't invest in a bull market, but these market last for decades and for some people, real estate is where it's at. Generally people have affinity for different types of investments.
I've spoken out about this a lot, but you're right and broke, and the people who are "wrong" are banking large.
Here's a story from last year.
Student from Vancouver buys a house in Markham, no frills, basic builder, doesn't even have appliances. Pays $600K gets me to rent it, there's a lot to rent in the subdivision I get him $2400, the tenant just sold his house and filed for bankruptcy and so he pays the whole year's rent up front. At the end of the year, the landlord tells me he needs to sell the house because he's been floating the entire thing with his Line Of Credit on the house. The rent shortfall is $600 per month, the guy tries to get the tenant to pay $3000 per month, the tenant refuses.
The house gets put on the market, and sells for $1,100,000 a profit of $400,000.
Who would ever in their right mind tell someone to do such a thing, and this guy basically made a half of a million $$$.
Rinse and repeat, over and over. It's easy to say, don't participate, save your money.
So after seeing hundreds of these heroes,
Single Family homes are appreciating the most.
Buy for affordability, and the money follows.
Look for pockets of affordability, buy there and the leveling drift will increase the area.
Buy good neighborhoods.
Buy transit or commuter towns and look for transit extensions or proposed transit extensions.
When looking for appreciation, you cannot chase yield on income.
The other point is that there is such a thing as fake return, maybe you get high rents, but you also have high turn over & risky tenants this translates to real money over time, as you pay back those high yields in damages, rent arrears, vacancy and renovations.
My favorite investment is a condo townhouse, all landscaping and maintenance is taken care of, it's pretty affordable without being low income housing. These are very stable investments and families can stay for a long time.
As a property manager, I like those 1 bedroom condos, very high quality tenants and I rerent regularly every 18 months, so it keeps me in work, but there is quite a turn over, and that translates to real money over time.
Other strategies to increase money are, buy a one plus den and make sure the bedroom is big enough for a room and turn it into a room. I went from $1600 to $2000 per month on one of these in the downtown.