thoughts on the housing market

[Guest Rashid1993]

I think the house prices are over valued, what does everyone else think ?

[Guest alex_manciu]

The house market price, like any other market, fluctuate depending mainly of the demand and offer existent on market. As a personal opinion, this increase in price is quite artificial, not being sustained by any solid economic factors. The most reasonable increase in prices should be equal or close to the inflation evolution and, most important, should be proportional with the increase and the value of the population's income. Personally, I live in Dublin, and I see the very same evolution of prices, sustained by nothing than the momentarily increase in demand, increase that is the result of (very important)  big wave of temporary students, people who are studying English and work, being entitled to, as part time employees. This "fever" which will probably end up in couple of years took the prices of the houses/apartments, both for rent or buy up with 20-30% in the last years. Due the fact that is much cheaper to pay a mortgage than to pay a rent, many people applied and succeed to take a house, using a bank loan, increasing in the same time the demand for new houses to be built. This whole process looks very close with a real-estate bubble, and have all the ingredients to be. The big question is when is gonna pop. 

[JamesIG]

[hi all - for clarity I have moved these posts here rather than being on the 'contributor of the month' post because I feel it is a market sentiment and strategy discussion. This is why you'll see 'edited by JamesIG' next to the posts.]