The mainstream media have latched on to the auction frenzy and have called that a property boom is at hand in the eastern states. Meanwhile, more serious economists such as Bassanese at the AFR "remain bullish house prices", while experienced property market analyst Michael Matusik notes that Australia's eastern states could see proce growth of up to 25% over the next 3 years. Over at Business Spectator, Robert Gottliebsen forecasts that Australia is heading for "the mother of all dwelling booms" caused by an imbalance between supply and demand.
That's a fair amount of positive sentiment doing the rounds.
It's no doubt confusing for new entrants to the property market, because on the flip side there continue to be negative angles reported too.
There's an old saying in investment circles (which is claimed as their own by a few people) that says: "a speculative bubble is a bull market which you don't have a position in."
There's much more than a grain of truth in that. The overwhelming majority of those barracking the property market dynamics are either renters (who doubtless want prices to crash so that they can participate in the market themselves) or people making an easy dollar from selling stories on the existence of a bubble. This all makes logical sense and 'twas always thus: property price rises naturally seem unfair to those not participating in the upside, and that will never change.
There are several negative angles which get churned over.
Articles continue to portray landlords as evil, making people homeless on a whim or turfing them out at the drop of a hat in a frivolous game of "eviction popcorn":
On the face of it, this sounds 'bad' and we are invited to be up in arms at the unfairness of it all, the angle being that an employed graduate can't get a mortgage. But there's no explanation of why she can't get a mortgage. Usually, that would only be because no deposit has been saved by the potential borrower. So is this an argument for a return to 100% mortgages then? Which, by the way, are the exact same products which also get blamed for speculative activity and booming prices.
It's a neverending negative loop, of course.
The market commentary where I am at the moment in England, has seamlessly shifted from a "devastating property market crash" to "a new property market bubble" in just a couple of short months. Literally only a few weeks ago there were cautionary tales that many remain in "negative equity after the crash" (this is indeed true in parts of the country) yet as prices are recovering strongly on a national basis it is already also being termed as a bubble. It's apparently a crash and a bubble at the same time.
With the mass proliferation of online commentary, I suppose that this is a trend which won't go away.
You only really have two choices when it comes to property: to complain about how unfair the world is or to do something about improving your own situation. If that sounds unsympathetic, it's not mean to - it wasn't so many years ago that I was 21 myself and as I entered the full-time workforce all the talk was of unfair and unsustainable London house prices.
But property markets in certain other parts of the country are struggling and will likely continue to do so. That's why I've only ever advocated investing in south-east England. and London.
It has to be said, for all the talk of a 'boom', Australian property price growth over the last few years has been relatively muted in plenty of areas, which after all, is the best long-term outcome for Australia - prices growing perhaps slightly slower than household incomes, effectively leading to a gradual improvement in affordability over time.
Some people will always do well out of property. Others will always get it wrong. Caveat emptor - buyer beware.