Bubble, bubble, toil and trouble

Whenever there is a downturn in any market, whether it is shares or property, there are always one or two people who try to make a name for themselves by predicting all sorts of outlandish doom and gloom.

The latest is one crowd who is saying the housing bubble has been so big that it will take years and years to recover. Indeed, the suggestion is that prices will not rise back above their November 2007 peaks until 2018 at the earliest. The size of the bubble, they say, is so large it may take until 2028 before prices recover and people who invested in 2006 and early 2007 start seeing capital gains again.

While I am not an economist, claims like these seem ludicrous and designed more to create publicity than provide any meaningful insight into the market.

There are a hoard of well-qualified and experienced economists out there making their own predictions, and none I have seen bare any resemblance to the latest, unqualified, soothsayer.

What I have seen and heard is that there are lots of variables that drive the property market, and predicting some of them is very difficult.

For instance, immigration is a key driver of the market. While numbers are down at present, the government can quite easily turn on the tap that will provide a fillip to the market.

There are lots of other factors like the government making houses more affordable, buyers who have been priced out of the market sitting on the sideline and strong employment levels, which arguably provide a good backstop to the market.

There is no doubt the market is falling from its high growth rates of recent years, but that doesn't mean total darkness is descending on the housing sector.

I hear an increasing number of stories about landlords wanting to sell up and do something else with their money. That is normal behaviour. However, I am also hearing stories, and seeing people get quite excited, about the buying opportunities which are starting to emerge.