So we have had another successful weekend of auctions and the first article I come across in the media this morning is about how we are in the midst of a “bubble” and that it must burst.

A clearance rate of 79 per cent was recorded this weekend compared to 77 per cent last weekend and 73 per cent this weekend last year.

There were 782 auctions reported to the REIV this weekend, with 621 selling and 161 being passed in, 62 of those on a vendor bid.

Yes we do have a very strong property market in pocket but I would not say that we have a booming and overheated market just yet; there is a very logical reason behind this.

When you have a booming market or a completely overheated market almost every property will sell, we are still seeing properties pass in even in the hotly contested areas. This means that even though there is a distinct lack of properties in some inner suburbs like South Yarra or Elwood the market is still capable of saying some properties don’t meet the grade and thus are rejected by the market.

In a market that is heading for a bust we see all manners of properties selling strongly and pockets that are competitive always have over inflated prices across the board, even for the poor quality properties.

I would challenge any so called expert to explain how in a market place where we have an ever growing population and decreasing amounts of property in certain areas (inner and middle suburbs) we can have a complete bust as when the market drops people will come back in a push prices back up.

I whole heartily agree we will see parts of the market drop or plateau out but sadly these will be the outer suburbs where there is an abundance of land available to develop.

The market at this time is being driven by simple market forces we have an under supply of property and an increasing level of demand.

To speak to an expert about investing in the property market please feel free to get in touch.