PROPERTY BUBBLE? ….Really… Please!

The property doomsayers ‘noise’ has settled a little since interest rates have stopped increasing for now.  However, with price values stabilising or showing decreases in some markets in the early months of 2011, I’m expecting this media ‘noise’ to start getting louder as logic is not going to get in the way of a good story that sells papers or gets ratings or drives internet traffic and debate.

The question I ask you as readers is; are you going to listen to this ‘noise’ or even believe it? This month I thought I would provide you with an article written by the Chief Economist at HSBC that was kindly forwarded to me by a client earlier this month.  It’s in response to some of the hype that has been in the market to date and puts an argument forward for why he doesn’t believe we are in a bubble.

Before you start I want to remind you once again that YES, some properties have performed terribly over the past 10 years and some have performed amazingly well.  The only difference in the past decade really is that the majority of property has done well, instead of the minority.  If interest rates increase further I’m already on record to say that I suspect the majority of properties certainly in the mortgage belt areas will underperform, compared to other areas/locations and properties.  So once again, this property investment game is not about just picking any old property. There is a real science to what is needed to select the right property.  If you don’t understand, then I recommend you get advice.  Not just any advice, get independent advice from someone who has no direct benefit in selling you that property.  Tell me, is someone who is being paid by the builder/developer to sell you that property – are they going to be impartial? No way!

Remember knowledge is empowering!  – If you do something with it! …enjoy this article

 www.businessspectator.com.au/bs.nsf/Article/Australian-property-prices-housing-bubble-pd20110317-F24WP?OpenDocument&src=sph

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