Australia housing

People keeps asking the same question:

'Is Australian property market at a bubble state?'

'If so, when will it pop?

My answer will be:

'Yes'

and

'not in the short term' and 'only when the time is right'

It may not sound very much but the point to make here is that in a market with price to average income of 7 time or more, it'll be hard not to call it bubble.

However, the economic condition has not reach a level that will pop the bubble yet.

The interest rate is still at a subdued level depsite rising.
The employment market has picked up and is likely to do so in the future.

So long as people have a job, the mortgage repayment will be the last to forego.

The implication for wannabe owner occupier and investors are very different.

The primary question an investor should ask is 'is the return on investment enough to commensurate my risk?

Whereas wannabe home owner should ask 'am i able to afford the repayments at the current interest rate level and at time when it increases by another 200-300 basis point?

If I were an investor, I will stay clear of proeprty market in general because the expected future return based on current valuation is likely to mean very anemic return at best.

As an wannabe onwer occupier, I will have no choice but to live with this ridiculous property price if I strive to get into the property ladder asap even knowing that I will probably be subsidise someone else's lifestyle in the not-so-distant future.