Newspaper article The Northern Star (Lismore, Australia)

No Bubble, Just Healthy Growth; Predictions of Housing Collapses Come and Go but Never Happen and the City of Sydney Keeps Booming Along

Newspaper article The Northern Star (Lismore, Australia)

No Bubble, Just Healthy Growth; Predictions of Housing Collapses Come and Go but Never Happen and the City of Sydney Keeps Booming Along

Article excerpt

THE new growth cycle in the property market has well and truly started and with it the discussion of Sydney real estate being overpriced and that recovery of the property market is the start of another (mythical) price bubble that scares everyone but never actually eventuates.

I have no doubt that the "experts" talking about a potential bubble have data and spreadsheets to back up their theories. But I can share with you after 30 years in real estate I have heard these theories since I've been operating in this space.

We've just released our latest McGrath Report, in which we predict a continuing residential property recovery Australia-wide in 2014 - including Sydney, Brisbane and the Gold Coast in particular. There is much reasoning backing up our predictions, so if today's bubble talk is unnerving you, please download a copy from our website - mcgrath.com.au so you can have an informed understanding of what you can expect in the market going forward.

The idea of a price bubble is pretty scary to those with little or no industry or buying/selling experience - which can be many of us. Property is an expensive asset and the idea of prices "bursting" would undoubtedly make some buyers concerned and delay. And all that does is ensure they miss out on a great opportunity to build wealth through one of our country's most reliable asset classes.

Even the Reserve Bank has described predictions of a housing bubble as "unrealistically alarmist". Dr Malcolm Edey, RBA assistant governor says: "We shouldn't be rushing to reach for the bubble terminology every time the rate of increase in house prices is higher than average, because by definition that is 50% of the time."

The first time I heard the bubble talk I actually thought about changing careers. I was very young and I thought, why be in an industry that is overpriced and about to collapse? The next time I had a similar amount of fear, but hung in there. As we now hear the doomsayers once again, I'm ignoring it and so should you. …

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