If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
No matter what angle I look at the whole situation (specifically Auckland’s market), it’s a bubble. If I look from the top, it’s a bubble, if I look at it from the side, the bottom, the front, even at it crooked on the piss, it’s a bubble. You consult the legion of “Experts” whom point out to you and say “see, look!” Auckland is not a bubble, and who are quick to offer their concocted explanation as to why it’s not a bubble. But even when I put my head against their straight out arm trying to align my vision with their straightened out index finger to what they are pointing out to. I see a bubble, I’m just not seeing nor registering the same as what they’re (claim) to be seeing.
Whether this holds any predictive value as to what the housing market will do next… No it most certainly does not. Looking deeper, the whole Global Financial system is just plain broken beyond any recognition. To have a given asset class’ prices appreciating at a several fold wages, especially for the time it’s being going on for is a rather irregular event. (In addition to that, Traditional financial analytical models such as those found in Fundamental analysis and especially Technical Analyst just seem to hold little weight these days)
The (so called) bubble will perhaps only (so called) “burst” when no one is looking and the nay sayers have stopped saying “nay”, the legion of masses who missed out finally cease continually wailing “bubble” at the top of their voices and resign themselves to high house prices (“Acceptance”), right at that point (perhaps) the rug may or may not suddenly be pulled out from under the frothy market by some invisible hand. Just like the Oil market, the commentators were saying that Oil will never come down, propped up by China’s growing middle class. It was when cries for government intervention ceased and had given way to “acceptance” (that Oil was going to stay high) by the masses, eventually the media got sick of reporting on it, Oil pricing silently slipped out the back door and went south (rapidly) after period of price pattern consolidation.
And as a further side note, perhaps in a rather jaded way, those crying foul at the house prices (being the commentators who flood sites like interest.co.nz) are perhaps unwittingly helping to fan the bubbly house euphoria.
