What is a property bubble anyway?

Posted on September 21, 2013 by | 0 Comments

The Australian property bubble is speculation that real estate prices in Australia may (currently) be overvalued. This may be a real estate bubble. The bubble has been driven mostly by housing within Australia becoming investment tools instead of necessities. This was driven by the powerful real estate lobby, who heavily lobbied Paul Keating, John Howard and multiple other Australian prime ministers. Some experts, including Treasury officials,[1] believe the Australian property market is a significant bubble. It is arguably the biggest property bubble in the world and has the potential to burst if certain taxation changes are enforced. These alterations may include the elimination of negative gearing and returning to previous levels of Capital Gains Tax or CGT (the key driver for the doubling of house prices within a span of 4 years as investors flocked into the market).

real estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterised by rapid increases in valuations of real property such as housing until they reach unsustainable levels and then decline.

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