This weekend marked the most anticipated game on the AFL agenda – Grand Final Day – which typically sees the property market spend some time on the bench. The short pause is a good time to reflect on the housing market – especially with speculation of a real estate bubble heating up.
On one side, the RBA has warned the market is overheating, driven by presumed demand from foreign investors who are driving up house prices. Another school of thought comes from Federal Treasurer Joe Hockey who has dismissed claims of a bubble. He believes the chatter is exaggerated due to a shortage of housing supply in Australia’s capital cities (where population is booming) and negligible housing debt levels. For instance, Melbourne is on track to become Australia’s largest city with a forecasted population of 8 million by 2053, and the CBD population increasing by 23 percent in the last year. To add, some property analysts suggest house price growth in Melbourne is simply playing catch-up after a couple of average years.
Remember to take the opportunity to reflect. The property bubble commentary often resurfaces, so best to assess all the viewpoints to help decide if the time is right to enter the market.
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