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

[Perry]

. . . an economist has warned.

Nuff said. A prediction soothsayer looking for media coverage for his business.

[eri]

that seems a pretty worse case scenario....

but those need to be accounted for too

[flyernzl]

What is generally forgotten (but is actually mentioned in the above scenario) is that as the recession bites new home building ceases.
Therefore, with a rising population, a housing shortage develops. Over time this pushes prices back up so eventually builders can once again build with the expectation of making a profit.
So there is a self-correcting mechanisim at play.

[Chris W]

If you're interested, here is a firsthand experience of the Irish property bubble

https://youtu.be/1hi7gV9uyK8?t=37

[Davo36]

I just watched that actually. Was quite good.

[Chris W]

I don't think its just a local issue >>> but

Qutown/Wanaka has a history of BOOM BUST.. seeing asking prices of over $1k per sqm for a tiny slab of land > 20min+ drive from CBD small tourist focused townships (#1-risk if tourism drops off etc) stupidly high rent just so investors can break even >>

I see major pressure points coming to a head >> esp if rates head higher

Incomes for the mass of residential population locally is either tourism based or property based- tradies RE agents etc .. now these same workers are biggest buyers / owners of recently purchased property at very high levels generally ... I've heard debt 500k-800k+ is quite common for 30-50yr couples etc here

I'd say the average worker and esp. families are really struggling with finances.. I really don't know how many keep their heads above water

I've got a family of four debt-free home in the central Otago area and better than average income ...and we don't have much free cash floating around after basic weekly expenses..

Now while property is booming and tradies can charge an arm and leg for any work.. thats not going to last forever..

Just like historically LOW rates 4-5% fine only $400-$600pw just to cover interest on loans for many.. will these last forever??

I see many 4-5 story apartment blocks going up at every corner of the township .. one could see an overdevelopment of small units/apartments ..

I think its all like a game of Jenga .. every Qtr stack another block to the tower .. how high will it go before it falls over and investors pull out of spec apartments in turn bankrupting developers in turn leaving tradies out of pocket in turn forcing sales of homes add in GFC 2 and it starts looking very BEARISH on an investment case for capital growth then you have buyings sitting on their hands prices fall banks call in loans or don't refinace >>

JBM,

What are you seeing in Queenstown now?

[JBM]

JBM,

What are you seeing in Queenstown now?

Not much yet ...as lockdown will affect R.E etc few months after lockdown ends will tell the story which IMHO will be bleak

[Chris W]

Not much yet ...as lockdown will affect R.E etc few months after lockdown ends will tell the story which IMHO will be bleak

JBM,

What are you seeing in Queenstown at the moment?

[Chris W]

Reposting here JBM's thoughts from another thread

[Bluecoat]

What do you call a 30% rise year on year for 2 years in a row?

[Frezzinghot]

What do you call a 30% rise year on year for 2 years in a row?

The scamdemic.

[Perry]

I'd call it socio-commie-government-sponsored inflation, on a grand scale.

The sort of thing that happens when idiots are in charge of the asylum.

[JBM]

JBM,

What are you seeing in Queenstown at the moment?

Continuation of insane rising prices ..all across the areas I follow ...I'm now based in Cromwell and its been as bad here if not worst ... places like Oamaru ...Invercargill ...very simply if you want a nice basic family home with Double Glazing etc ... in the last 5yrs they have DOUBLED in value ...

My seasonal export based job has gone up max 5% over the same time ...how much longer can this bubble grow ?? well IMHO another major rate increase could well break the camels back .. we see lowest lending rates in the low 4's % all these large Morgs + living costs spiking ....Oil Bull market back driving Energy costs higher(that affects everything!!)

And what does are Govt do >>>https://www.newshub.co.nz/home/polit...ge-growth.html

Jacinda and team are doing their best to implode this countries credit rating..we are heading to a major Slow-down ...House Supply will meet and surpass demand as how many FHB can continue to soak up one of the most expensive housing markets in the world

>> When the boarders open net Young skilled Kiwis will leave in droves ...

1 in 10 Kiwis are employed in the Property sector(any slowdown will hurt) ... Tourism decimated rebuild will be slow..

the Govt + Kiwis have spent like never before ....day of reckoning is coming

Jacinda and team blew 55.7billion of the FED's money in just over 12months ?? what dod we get again for this outlay ...Lockdowns>> and BS

[chook]

Continuation of insane rising prices ..all across the areas I follow ...I'm now based in Cromwell and its been as bad here if not worst ... places like Oamaru ...Invercargill ...very simply if you want a nice basic family home with Double Glazing etc ... in the last 5yrs they have DOUBLED in value ...

My seasonal export based job has gone up max 5% over the same time ...how much longer can this bubble grow ?? well IMHO another major rate increase could well break the camels back .. we see lowest lending rates in the low 4's % all these large Morgs + living costs spiking ....Oil Bull market back driving Energy costs higher(that affects everything!!)

And what does are Govt do >>>https://www.newshub.co.nz/home/polit...ge-growth.html

Jacinda and team are doing their best to implode this countries credit rating..we are heading to a major Slow-down ...House Supply will meet and surpass demand as how many FHB can continue to soak up one of the most expensive housing markets in the world

>> When the boarders open net Young skilled Kiwis will leave in droves ...

1 in 10 Kiwis are employed in the Property sector(any slowdown will hurt) ... Tourism decimated rebuild will be slow..

the Govt + Kiwis have spent like never before ....day of reckoning is coming

Jacinda and team blew 55.7billion of the FED's money in just over 12months ?? what dod we get again for this outlay ...Lockdowns>> and BS

[Perry]

I suppose it's sort-of obvious in one way; and not at all in another.

I speculate that a property price 'bubble' only becomes discernible as such if and when it pops.

But if it goes on and on and on, then what? Just a trend . . . ?