Is Australian Real Estate In A Property Bubble?
-
Loading... - Laura Thompson
- 21 Feb 2023
- 68 Views
- 0 Like
- 0 Comment
Potential property bubbles and crashes in the Australian housing market are hotly debated and heavily scrutinised because housing is a lynchpin of the country’s economy. Much of Australia’s wealth—for both individual households and financial markets—is dependent on property investments.
Understanding the economic concept of a property bubble, and the factors that contribute to their development and deflation, can help you better interpret Australia’s property market outlook and the impact of changing economic conditions like—yep, you guessed it, rate hikes.
What is a Property Bubble?
A property bubble is an unsustainable build up in house prices that’s based on the enthusiasm of investors (rather than a substantial underlying reason). Bubbles, therefore, are seen as on the brink of bursting, resulting in a decline in prices—also known as a correction, collapse or crash.
Increased demand for property and lack of supply can cause house prices to rise steeply, but only up to a point. When prospective buyers are no longer willing or able to pay these higher prices, the housing market can fall just as sharply. Read More..
