Is the real estate bubble about to burst?

Easymix

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Friday, January 13, 2012 11:36 AM

Some media reports are suggesting that real estate is over priced and the bubble is about to burst. Is it?

It never ceases to amaze me how much the media loves to talk about real estate. The sensational headlines, which are often not backed up by clear data, seem to be pulled out of their archives on a regular basis!

In my opinion the market has started to gain more confidence. At Kellands we have certainly seen a number of “multi offer” sales, whereby there is more than one party interested in purchasing a property at one time. Kellands has not seen as much of this type of sale for a couple of years. It is a clear indication that there are more buyers in the market than property to buy that has the ‘X factor’. This is despite a large number of properties coming onto the market in November, post Rugby World Cup.

I think this trend will continue and the ultimate result is that prices will be driven higher unless we have a lot more homes being marketed for sale. Auckland does appear to be on its own, regional towns and cities don’t seem to have had significant increases in the numbers of properties sold or increases in prices.

The effect of Christchurch on the Auckland market is contributing to the increased numbers of purchasers, as is the low interest rates and a strong number of first time buyers entering the market.

While no one can ever accurately predict what the market will do over the coming months, to me, all indicators are suggesting that the market will continue to grow.