Is the Sydney property bubble about to burst?

As sydney siders, it seems like every year we have the same conversations about property. "geez its expensive", "look how much theyve gone up over the last 12 months", "How can anyone afford to live here", " The bubbles about to burst"

Yet every year we seem to reset the whole conversation and watch the prices go ever higher. Does this mean that there is no bubble OR has it simply just gotten bigger. 

You might be suprised but the answer is yes to both. We have no bubble so long as the market conditions remain strong enough to support the market value. Which is the key to everything, market value.

A burst bubble is the market realisation that a type of asset is no longer worth the value it was previously but not that it never was that value to begin with. At one point in time, the market did determine that the asset was worth more.

Now for most people, this is troubling, and I agree. On the one hand, market forces should determine property values to bring about the true value, but on the other hand, properties, especially for owner occupier, homes are places of shelter, they have great intrinsic valueand they are not bought and sold on a whim like you trade on the sharemaket.

The purpose and nature of the property market is a unique force and should be treated so.

Now lets answer the real question of this article. Will this "bubble" burst.







Posted in: Tips

Contact us today.

Additional Comments? * :