Why You Shouldn’t Bet on A Housing Price Collapse

Looks like in every discussion about property investing in Australia there’s always a concern about the possibility for the existence of property bubble and what will happen if the housing price collapse. After several years the housing prices keep going up, a lot of people actually believe that these prices are at their peak, and the only way to go after something is at its peak is down. Many experts and observers also believe this to be true, but just how is this condition? There is actually no real evidence yet to this condition, but with so many symptoms that have appeared and expert analysis that are agreeing to such view, it’s quite alarming.

So is that mean there is a potentially huge risk to invest in a property currently when prices are might be at their peak? First of all, lets take a look at some of the most influential analysis in the market. If we observe these analysis deeply, actually there is a similarity amongst them. Usually these analysis are made based on the observation in major cities like Sydney and Melbourne, where housing prices have been moving up so fast the last few years and starting to slow down. It’s also predicted that the prices will slow down significantly by 2018.

Sydney is predicted to be experiencing only 2% rise while Melbourne is at 4% by the mid 2018 according to a report published by BIS Shrapnel. So actually no one is predicting any price collapse yet, but they do believe that the prices are definitely slowing down in some major cities. In fact, many reports even showed that the prices in some other areas are continuing to rise especially in areas with good economic and infrastructure growth.

The reason to this condition is the demand in the market that remains high, while many areas are currently in an undersupply condition, causing the housing prices keeps moving up. Currently the banks are still providing relatively easy loans for home buyers, which keeps the demand high. The growing economy in many areas and immigration flow to the country are also keeping the demand for housing units remain high. So should you bet on a housing price collapse? You better not, at least not in the following three years, or you might just miss some good investment opportunities that might provide great returns for you.

Is Australia in a Housing Bubble?


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