myproblem,you need to remember here is price and cost. the price...

myproblem,

you need to remember here is price and cost. the price may have gone up 20% but the cost certainly hasn't.

There is a realistic price from cost, which is 3.5 years wages, when price shoots above that the market becomes over priced.

your last 20% gain was made by demand from investors only 75% of all demand comes from investors and 25% from real people buying for themselves. this is a very abnormal ratio and is what has pushed the price up.

You have to ask yourself, if the only reason house prices are going up is due to investor money pouring into it. then is this not just a speculative bubble as there is no real fundermental reason for the prices to go up.

you then need to ask yourself what happens when property is no longer the recomended investement vehical, 80% of the buyers vanish and what will that do with pricing when real people cant afford to buy these house's to live in.

you can not pick the top of a bubble, you can only identify it and understand the reasons for why its inflating, then sit back and watch for those reasons to reverse and see the carnage after.

Melbourne Median house prices should be about $270K (3.5 years average wages) if housing was being priced to true value. like it always has been.

Otherwise if you think this is not the case, can you explain whay a small building that sits on a block of land can tripple in price over 10 years? when its still the same house and land?