Blowing Bubbles —
There has been some interesting commentary in the market recently regarding ‘The Bubble.’ This conversation is cyclic and pops up regularly on the news roster. Mike Hosking had a thing or two to say about this last year, and nothing has changed – watch the video here.
Is there a bubble when the market drivers are solid and sensible?
1. Demand is driven by migration and cheap money.
2. Cheap money is here for a while.
3. Supply is only partially being offset by new housing.
4. It will be a long time before housing stock can meet demand.
Where is the bubble?
Christchurch is an example. The early rises in the market have settled with supply now meeting demand. The balance has been restored in the market without anyone losing their shirt.
We are not like America, Ireland or Spain where other external factors caused their market demise.
So… business as usual then.
