A bubble or no bubble at all…..?

I think it depends on how far and for how much longer these increases in prices go. The higher the bigger the fall if any. I thnk it also would depend on the interest rates and whether the herd stampedes or not.

History tends to show a small drop (maybe 20%) and prices staying stagnant for a while whilst inflation erodes the price.

I think with property and one reason it is more stable compared to shares is that if prices drop, (as long as the loan can be maintained) most people won’t sell, they tend to hang on for the recovery.

Josh

Dear Fudge and Broz :o)

I tend to think that interest rates will rise a little. Then those who are overcommitted will panic. These are the kind of investors who got sucked in by the Investment Seminars and who bought properties in oversupplied areas. They were sucked in by the “buy buy buy” stuff and they’ll be sucked in by the “sell sell sell!!” stuff that will no doubt happen when IR’s rise.

I do believe many of those new units are over-valued- with valuations made “in-house”. There ia already evidence of this with people trying to sell in sydney. It will be borne out further when the off the plan units are finalised and people wish to sell them- there just won’t be the tenancy for them. And places like Southbank, Melbourne, will become the new urban ghetto, I reckon. When I was in melby recently, all I read about was what a shocker of an area it is, with the cops there stopping fights all the time. And yet this is where people are buying new apartments??

I tend to think the more experienced investors did their usual investment checking (some call it due diligence- i just call it checking), and didn’t go crazy and overcommit. For those who have, Ido think it’s inevitable that they’ll panic and chuck all their apartments on the market. Given that the values are already questionable on some of these new apartments, once they start coming onto the market, and there is a generic range for buyers to choose from, it seems that buyers may be able to pick and choose.

I still don’t think these apartments will be CF+ though. CF+ ones still seem to remain in the rural and regional areas, and I doubt their prices will fall 20%. Perhaps the prices in regional/rural actually reflect market values already.

kay henry

My 2 cents worth [?]

I like Kay belive that interest rates will move up but only by a small amount. But that may be all it takes to push some to the point of sale, for they may fear that the bubble has or is about to burst & thier place will drop in value. This will increase the amont of properties for sale & give the buyers more choice. This of caurse will then be a buyers market, people will be willing to take less for thier property so as you buy thiers & not the one down the road. This of caures then drives the prices down.
It may be a good time for use all to be looking to increase our property holdings as rents will more then likley stay put.
As we all know this is only a prediction on what might happen. So all we can do is wait & see.
Of caurse there will be those inverstors who will be troubled by a price drop.
But just remember you only lose if you panic & sell at times of low property values. If you hang in there & lets face it most of use are in it for the longhaul things will bounce back.

Cheers
Craigc.