How to Predict a Housing Bubble


Henry Goma, Negosentro | Anyone who has ever bought or sold a property will know that the price of housing changes depending on certain influences. Things like interest rates, housing availability and the availability of mortgages can all have an effect on house prices. When prices rise sharply, it is called a housing boom and the time that the boom lasts is called a hosing bubble.

Would it be beneficial to be able to predict a housing boom or bubble? Of course, because if you can predict when the house prices will rise and purchase properties beforehand, or at the beginning of this rise, you will then be able to sell later on at much higher prices and perhaps make a good profit.

The average housing bubble lasts approximately 8 years with the dip that follows lasting around 4 years. In order to make a profit, it is necessary to be aware of when the bubble is starting, or at the very least within the first couple of years, as once the downturn comes and the value of properties falls and stabilises at a lower rate, you will have missed the opportunity for a profit.

Many people advise that watching the influences of banks and credit industries will give an indication of when prices will rise. Other things to watch out for are a general upturn in economic growth, a rise in overseas investments or an increase in foreign student numbers. All these indicators may well signal the start of a housing bubble.

Stability in the economy and good growth in earnings will all give the impression of more disposable income, which in turn will fuel a spending boom where housing will be seen as an investment. However, this situation is not sustainable for very long and the slump will follow in time. So, if you want to take advantage of a housing bubble knowing how to predict the right time to invest is essential.

How to Predict a Housing Bubble by Rubber Bond.

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