The property bubble denialists continue to ignore reality.
Combined with increasing interest rates (as the cost of money returns to a more reasonable level), it appears that the market will be belatedly doing its job, proving the adage, the solution to high prices is … high prices.
Assets prices inflated by excessive leverage are not sustainable, leading to a gross misallocation of scarce resources. It is a lesson that Australian property buyers appear slow to learn.
Why are seemingly rational people paying so much more for property than they did even as recently at 10 years ago? They fall for the "property lie": the myth that property "never falls in value" and will be "more expensive next year".
The housing bubble continues to inflate in earnest, as the last major weekend of the auction season delivered a spate of booming prices. Can it continue?
In some parts of Australia and contrary to what property "experts" might suggest, we have an almighty bubble. But it's not increased immigration that's fuelling the dire housing shortage. So what is?
When the First Home Owner's Grant falls away and if interest rates return to 7-8%, it is a more logical response that house prices will fall in the coming years, rather than rise.