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The Property Market Bubble

It seems like we may have found out that Father Christmas and the Tooth Fairy don’t exist but we cling to so many other fictions as though they where fact.

Have you stopped for a moment to look at the current property bubble that seems to recently have sprung a leak.

We are told constantly that if you have any spare money, invest it into property. This is great if you have spare cash and if the market is bullish, as it has been, bouyant because of all the hot air from estate agents and others who promise you a safe and pleasant journey.

This theory does not work as well for your home. Have you noticed that whilst your properties value has increased, so has every other home in your area and practically country wide. So when and if you want to move you find that you end up spending the money you made to buy an equivalent home. Where is that profit we where promised?

The most practical way of making money in the property market is to buy the worst house in the best area. A fixer upper, so that you don’t overcapitalise on any renovations you have planned. Or if your crystal ball is working well you can buy in an area that then becomes popular.

The problem with the property bubble is, if you get in too late you end up getting the short end of the stick.

I must say I have the feeling that this bubble is more likely to burst, the more it is inflated…

The only people that a high property price benefits are those who are speculating to earn a return, those with more than 1 property. Otherwise if you are a first time buyer, an inflated property price really has a negative effect on whether or not you can afford a home. To those that already have a single home the current price has little effect other than in raised fees as you will rebuy at the current pricing.

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