Increasing house prices are the only clear signs of a property bubble, according to The Commonwealth Bank of Australia. Because of this a new index has been created to monitor the vendor asking price to further understand the trends of home values.
Over the past year, it was found out that vendors in Sydney had increased their asking price by 14%, similar to the 14.8% price growth posted. All capital cities had increased in their asking prices, except for Canberra, where the asking price decreased to 1.5% last year.
In order for the situation to be a real bubble, several factors should also be considered. Apart from the rise in home values, we should also take into account housing debt, as well as whether demand is satisfied or not. If there is an undersupply in housing, this would fuel further the house price increase.
Read more about this on the Property Observer website.