Dec 16, 2019
Welcome to Finance and Fury,
Are we in a property bubble?
There is no question that the Australian property market has become significantly overpriced – but is it a bubble and due for a significant downturn? – For this – only talking about capital cities – most of the land isn’t in a bubble
First - A property bubble is a form of “economic bubble normally characterised by a rapid increase in market prices of real property until they reach unsustainable levels relative to incomes and rents” – then like most bubbles – prices at some point decline
The answer is yes – we are in a bubble – prices can continue to go up – but affordability is the key –
Unless wages keep going up or negative rates come in – property may struggle to continue to grow in prices
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