property bubble confirmed -finally, page-14

yeah this story in the age on tasmanian property boom was true but shows how crazy these investors are.
(except the ones who got in first).

They arent expecting population growth in tasmania, in fact last I heard they are still anticipating a decline.

I think you can compare this to the example The Economist gave about a shopping mall on the south pole, it may have intrinsic worth but should be valued at the discounted present value of its rental yield ie nothing.

These properties in Tasmania will NEVER get back their capital cost in rent. HArdly an investment. Why are mainlanders buying then? Because they 'seem' cheap compared to the bubble priced properties of Sydney and Melbourne.

Maybe the bubble will continue a little longer. At the end of the day prices wont fall until there are more people that beleive they are overpriced than believe they are underpriced and I've found Australians are much more stubborn than in other countries. Currently, it seems to be only the more inteligent, open minded ones who are able to see the bubble for what it is.
I would argue that even is one admits that The Economist 'could' be right they would see that buying or holding property is therefore a gamble with more risk than the potential return.