Is the Property Market Overvalued?

Introduction

"... predictions for the property market (and who doesn't); How the market works over the short term and the long term; The difference between property bubbles and property booms; Why it can be a good idea to buy when prices are falling; The principles of buying a property to let and what the..."

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Chapter 4: Understanding the Property Market

"... attacks on the World Trade Centre, the war in Iraq in 2003 and the Credit Crunch of 2008. For more information on this is and how it affects the market see the chapter Property bubbles and Market Crashes..."

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Chapter 6: Property Bubbles and Market Crashes

"... few property owners who are prepared to offer their real estate to the market. The difference between bubbles, Bursts, Booms, Busts and Crashes; Examples of bubbles bursting compared to market busts; What the UK property market follows; The role of..."

"... to the market. Examples of bubbles bursting compared to market busts; What the UK property market follows; The role of confidence and capitalism in the property markets; When the figures..."

"... In many countries, including the UK, protecting property prices from large falls was part of that plan and a political necessity. - Property bubbles - Bubbles are often confused with booms and crucially property booms are often misreported as property bubbles. For a property bubble..."

"... from large falls was part of that plan and a political necessity. - Property Bubbles - bubbles are often confused with booms and crucially property booms are often misreported as property bubbles. For a property bubble to occur real estate must be over valued by the market in isolation...."

"... as property bubbles. For a property bubble to occur real estate must be over valued by the market in isolation. If, in 2008, the economy had continued to grow but house prices had started to drop then it could be said that there had been a property bubble. A perfect example of a real..."

"... perfect example of a real bubble was the route that dotcom shares followed in the late nineties and at the start of the millennium. There was an over confidence in what internet companies could achieve and a strange concept that the more money the company lost (known then as its "burn rate"), the better it..."

"... and individuals piled in, driving the share prices of on-line companies sky high, a bubble was occurring. The burn rate theory might have been right, this was new technology and virgin territory. But it wasn't. Investors pulled out, the bubble burst and share prices for many internet related businesses..."

"... out, the bubble burst and share prices for many internet related businesses plummeted. Crucially this happened with little affect on the rest of the economy. On it's own it can sensibly be called a bubble. Understand the difference between a boom and a bubble and you realize that there has..."

"... the difference between a boom and a bubble and you realize that there has never actually been a property bubble in the UK. The early nineties saw houses prices fall as the economy moved into recession and rose as it came out the other side. The same events followed the 2008 downturn and in both cases changes in value from peak to trough were less than 20% . British property follows the business cycle of Boom and Bust rather than a separate and isolated bubble and..."

"... gradually became clear that Clapham was up and coming, but not that quickly, which caused a bust and two bedroom apartments lost around ten percent of their value. A similar situation in 2004 pushed the price skyward to £270,000 but only for around eight weeks before sinking back to the same value they had been selling for three years previously. In percentage terms these were relatively small changes and so reflect boom and bust rather than bubble and..."

"... is not to say the property bubble concept isn't valid and it does occur. Ireland was a striking example where prices moved up ever higher from the turn of the millennium. The collapse in values, approximately 50% from their peak, was far greater than the general recession of the country or any reduction in GDP. The business cycle had moved to the bust phases but real estate was much more than just bust, it was a burst