Do we have a housing bubble in Australia and if so, will it crash and cause big problems for everyone?
There are so many contradicting views in the news that it makes you wonder if anyone really knows what the reality is. If you look into the background of some of the commentators though, you can get an idea that some opinions are weighted depending on the business interest. I had to laugh yesterday, I got an email from a financial advisor saying the property market was doomed and to get out quick. He then went on to list some great stocks to buy into on the ASX. 2 minutes later I got another email from a property investor saying the time was never better to buy residential real estate as an investment!
To my mind we all have to live somewhere. There will always be rental properties because some people do not want or cannot afford to buy their own home, thereby creating an opportunity for investors. Government regulation impacts on property prices and also on rental prices - its up to them to keep things on as an even a keel as possible. As long as the national economy keeps ticking along, there will be investors seeking investments. I cannot see a major change in Govt policy looming that will adversely impact any mainstream investor - regardless wether it be stock market or property. Nothing has changed from our historical perspective - those who live on the edge of debt servicing are most exposed to the big gains and the big loses. Anyone who is concerned just needs to be a little more conservative and spread the risk with their investments.
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