Being a bear in a bull housing market
I have a bearish outlook on the Australian housing market. It's a difficult position to hold at the moment because all the figures disagree with. House prices are going up, even COVID failed to dampen it much. I feel a bit like the guys in the movie Big Short scratching their heads thinking 'why', why are prices still going up? What is the basis for this? Of course, the Big Short story is a very different situation to Australia's housing market. But there is at least one thing that is similar. That is, when prices are going up, people make money, and the more people see other people making money the more willing they are to put their own money into the market and to abandon their rationality, with well, gay-abandon. Markets do operate on a supply and demand model. More demand, limited supply, prices go up. However, this in my opinion, is now probably and outdated and overally simplistic way to look at economies as it sometimes insinuates that this behaviour is rational...
