What is a property bubble and are we in one?
Talk of a property bubble is swirling through the housing market. But what does it mean, and how do you know if we’re in one?
The Australian property market has enjoyed a strong run the past couple of years amid skyrocketing housing prices across the nation.
Driven by record low interest rates and a pandemic that drove many Victorians to upsize their home or move out of the city in search of greener pastures, house prices rose by 10.7 per cent in 2020, and 18.6 per cent in 2021. The big banks have predicted more moderate price rises for Melbourne in Melbourne in 2022 of between 5 and 8 per cent.
Data shows that the median house price is fast closing in on $1 million, which is faster than at any other time in the past three decades. In some suburbs, prices have been rising by hundreds of dollars a day, pushing home ownership completely out of reach for many. But many are wondering whether we’re still in the boom, if the market could be showing signs of dropping, and whether in fact we’re in a property bubble.