Is there a bubble in the property investment now?

Muppy,

Thanks for bringing our attention to the Productivity Commission’s report. I find their stuff eminently readable (very plain English), and balanced enough to be credible.

I remember when I bought my first IP and missed out on the FHOG- which was, I think, at 14k at that time. Had I know then what I know now… well, I might have done things differently. :o)

Raymond, I think when there is a RE boom, there will always be talk of a RE bubble. There may indeed be a bubble for those areas you mentioned. But if you buy a place that is overvalued to begin with, well, you’ve just bought yourself a bubble!

This “bubble” has not purely been from overseas investors, it’s also had a great input from “mum and dad” investors- first time investors who went to property seminars and put their own home on the line, in terms of equity. Some would have done very well, but really, if many of those people bought the expensive OTP apartments after 2001, it’s unlikely they will make huge profits when the apartments have been completed. That’s my opinion, and I’m sure others might have a different one.

Focussing on the “bubble” is a kind of panic response, I think. The other thing is, the discourse of the bubble has been around for a couple of years now, and properties in certain areas, continue to defy the bubble logic.

The bubble isn’t trouble if you don’t get in over your head.

kay henry