Overvalued property market or simply a sign of investor confidence?

[Nicholas Wallwork]

If you read the financial press you are bound to come across headlines suggesting property markets around the world are overvalued. Many suggest the USA is overvalued, as is the UK, Australia and Canada seems to have been overvalued for a decade. Despite the doom and gloom from some so-called experts many of these “overvalued”

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[Longterminvestor]

While traditional valuation methods can give an indication of an overbought/oversold situation, the price of any property is simply a reflection of confidence. To say that a particular market is 20%, 30% or 40% overvalued is just plain crazy. If you think of investment markets as a simple information exchange, all opinions and views are recognised by the market and a general consensus arrived at.

 

[nmb]

Different opinions make investment markets, let us not forget that. We must also remember that a property is only worth what somebody is willing to pay it. If it is worth more in theory then great, but you can't bank theory, you can only bank cold hard cash.

 

[lookinginvest]

While the theory associated with property investment is very interesting, if you can read levels of supply/demand you will be successful. At the end of the day, it is the supply/demand ratio which will dictate the direction of property prices.