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Has anyone witnessed firsthand a property price bubble? What does it look like?

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  • Bob Kane
    replied
    The red line seems to be going only one way to me.
    And that is with a log scale.
    Is the only dip around 2006?

    Leave a comment:


  • Chris W
    replied
    Originally posted by Davo36 View Post

    The trend is up, but couple of dips there mate.

    Here is the chart for both nominal and inflation adjusted prices (also referred to as "real"). From RBNZ house price study dated January 2016


    Leave a comment:


  • Bob Kane
    replied
    Originally posted by Perry View Post
    I was and I can vividly recall the mortgage interest rates, back then.
    Good.
    You would have noticed that the mortgage rates of 21% at the start of 1987 reduced to about 12% a few years later.
    What did that do to house prices?
    In your opinion, was there a crash in residential house prices over that time?

    Leave a comment:


  • Bob Kane
    replied
    Originally posted by Davo36 View Post
    You were an adult in 1987?
    Obviously I have a gap in my education.
    I'm happy to be corrected.
    Why don't you explain what happened to residential housing in 1987 and the next few years.
    Perhaps some examples of property prices might help me understand better.

    Leave a comment:


  • Courham
    replied
    Originally posted by Perry View Post
    I was and I can vividly recall the mortgage interest rates, back then.
    1970-75 was a major dip!

    Leave a comment:


  • Perry
    replied
    I was and I can vividly recall the mortgage interest rates, back then.

    Leave a comment:


  • Davo36
    replied
    Originally posted by Bob Kane View Post
    Going from memory - yeah, that could be a risk - any dip in one quarter was matched by a gain in the next.
    So we didn't have a crash, just a few dips that quickly recovered.
    It was carnage in the rest of the NZ economy but housing was pretty solid after 1987.
    You were an adult in 1987?

    Leave a comment:


  • Bob Kane
    replied
    Going from memory - yeah, that could be a risk - any dip in one quarter was matched by a gain in the next.
    So we didn't have a crash, just a few dips that quickly recovered.
    It was carnage in the rest of the NZ economy but housing was pretty solid after 1987.

    Leave a comment:


  • Davo36
    replied

    The trend is up, but couple of dips there mate.

    Leave a comment:


  • Bob Kane
    replied
    Hint: check the property price index.
    How big was the drop and how long before it recovered?
    The sharemarket tanked but housing didn't.

    Leave a comment:


  • Davo36
    replied
    Originally posted by Bob Kane View Post
    We've never had one in NZ so you may not get many witnesses.
    At least, no living NZer has experienced one in NZ.
    Some countries have had housing bubbles that burst - you should google them.
    NB If it doesn't burst then it wasn't a bubble.
    Hint Bob: 1987...

    Leave a comment:


  • Bob Kane
    replied
    We've never had one in NZ so you may not get many witnesses.
    At least, no living NZer has experienced one in NZ.
    Some countries have had housing bubbles that burst - you should google them.
    NB If it doesn't burst then it wasn't a bubble.

    Leave a comment:


  • Davo36
    replied
    Google mate.

    Leave a comment:


  • Has anyone witnessed firsthand a property price bubble? What does it look like?

    Just wondering if anyone has witnessed firsthand a property price bubble and can share their experiences

    1) what did you see was happening at the height of the property price bubble?
    2) what happened afterwards?
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