So what is a property bubble?


The Australian property bubble is speculation that real estate prices in Australai have become overvalued. This may be a real estate bubble. The bubble theory has been proposed since at least 2001, yet Australian house prices have continued to rise. Some commentators, including one Treasury official, claim the Australian property market is a significant bubble. Others suggest it is not a bubble and that house prices have the potential to keep rising in line with income growth.

real estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets. It is normally characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels relative to incomes and rents, and then decline. One issue with the standard bubble definition when applied to Australian property is that Australian house prices relative to incomes and rents have not increased for over a decade, with the national price to income ratio having peaked in 2003 and remained relatively steady since that time, although with some variation between Australia’s major cities.

Read more here… Property Bubble

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