Debate rages on about what’s going to happen next with property prices across Australia’s various property markets – particularly in relation to those which have experienced rapid recent growth.
Commentators, economists, doomsayers and armchair experts alike all have opinions about whether the recent price growth experienced in some suburbs across Sydney and Melbourne is sustainable, and indeed if it constitutes a ‘property bubble’.
But what about the people actually out there buying property? What do real-life investors think of all this chatter, and is it changing their plans to purchase?
We spoke to two very different investors to get their opinions on whether a property bubble is forming and why everyone’s still talking about it.
Sze Chuah is a 35-year-old investor with 21 properties who works in the finance industry.
Julian Lancey, a teacher and recent first-time father, has six properties.
Here’s what they had to say.
Smart Property Investment: There’s been a lot of commentary lately the ‘property bubble’. What do you think about this? Do you believe Australia, or any markets across the country are at risk of ‘bursting’?
Sze: I’m pretty sure I’ve heard that term used every year for the last 20 years.
So I personally don’t believe in it and I think there are some areas and some markets that are potentially a little bit over priced or there’s a lot of activity happening – but ‘bubble’ implies that there’s a substantial overpricing by 30 to 40 per cent and there is going to be some sort of correction to that kind of effect and I can’t see that given the fundamentals of the property market in Australia.
So, I personally don’t think so.
I’m pretty sure I’ve heard the term 'property bubble' used every year for the last 20 years.
Julian: I think it’s total crap. People keep trying to compare the Australian market to the pre-GFC American market and they’re just talking about two completely different things. The signs just aren’t there.
This is already evidence of the market cooling off. A property burst is everything disappearing – not slowly going down and following the property lifecycle. That’s what’s happening here.
I just think the property bubble is all bullsh*t.
There’s no better investment than property. You look at the other options and they just don’t compete. They talk about interest rates going up, sometime next year or a year away or two years away, but at the same line they talk about prices continuing to go up. So there is still no better investment than buying property.