What are your thoughts with this, “property prices up highest within last 17 years.”
To those who think property prices will be dropping, perhaps the wait also needs a reason? If the reason is valid please continue waiting. If the reason is simply a thought, then think again and perhaps look deeper into more potential reasons too. Property prices do not drop simply because people are expecting it to drop. In 1998 for example, property prices did drop more than 10% but that was a one-time occurrence and property prices have since recovered. So, the potential of another property price drop may need to be caused by another financial crisis first.
Now, let’s look at an advanced property market. Way more advanced than ours. It’s the Australian property market and the city is none other than Melbourne. Article in nst.com.my Australia’s housing market is booming again and it has the biggest monthly price gain in 17 years. CoreLogic Inc. data released Monday showed that prices in capital cities rose two per cent, led by Sydney and Melbourne.
Tim Lawless, head of research at CoreLogic said, “Australia’s housing market is in the midst of a broad-based boom.” The rapid gains have been “spurred on by a combination of record-low mortgage rates, improving economic conditions, government incentives and low advertised supply levels.”
The article is a comprehensive one and has more details on the property market including the auction market (their auction is not from the distressed market, just another form of selling their home) Article in nst.com.my
By the way, property prices going up by 2% every month is BAD news
I know, if I am the owner, I would welcome this good news of 2% up per month. However, if we understand that property prices must be supported by a similar rise in income, else it would soon become unaffordable and when that happens, prices are considered speculative. No one I know have salary increments every month. On a yearly basis, probably 5-6 percent increment in salary is more appropriate which meant that it is not enough to keep up with the monthly property price increase.
If this happens for just one year because the year before was very bad for property prices, then it could still be acceptable. However, on a continuous basis, this will mean that very soon, not many people could afford to buy a property. As an owner, I wish for an orderly price increase. I actually do not need any sudden jump in property prices nor would I want any sudden decrease in property prices too.
I think we will just have to wait and see what happens a few months down the road. The amazing thing about some of these advanced property market is that their data is by far more transparent and are up-to-date and usually available very quickly versus having those numbers only one quarter or 6 months later which does not help with planning.
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