{"id":42737,"date":"2017-02-03T16:59:11","date_gmt":"2017-02-03T09:59:11","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/how-to-spot-an-impending-real-estate-bubble\/"},"modified":"2017-02-03T17:12:47","modified_gmt":"2017-02-03T10:12:47","slug":"how-to-spot-an-impending-real-estate-bubble","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/how-to-spot-an-impending-real-estate-bubble\/","title":{"rendered":"How to spot an impending real estate bubble"},"content":{"rendered":"


\nTelltale signs to watch out for
\nBeware of the POP! Image: petrmalinak\/Shutterstock
\nA real estate bubble is a global economic crisis that happens when the rising prices of a property market suddenly fall and cause the economy of a nation to slump for an extended period of time. One example of this occurrence is USA\u2019s recession in 2008 that resulted from a real estate bubble forming and subsequently popping in the country.
\nThe US government lowered restrictions for home loan requirements in order to boost growth in the real estate sector. However, most of the borrowers had bad credit or were individuals who speculated that property prices would continue to rise and bought a home for investment purposes and not for residential use.
\nAt the same time, developers launched a massive amount of supply into the market as they saw growing demand, but did not realise it was artificial demand. The turning point was when the bad-credit borrowers could no longer afford to pay off their loans. Defaults happened all over the country and showed investors that the rising price of properties was based on artificial demands. This forced investors to stop buying property and prices dropped rapidly. Eventually financial institutions ran into huge debts which caused the American economy to stumble.
\nMore: Remote risk of property bubble in Thailand
\nThere are no ways to completely prevent a real estate bubble, but there are some indications when one may be forming and there are ways to help stop it from inflating. One way to make sure that the property market in a country isn\u2019t at risk for a bubble is to look at the restrictions for home loans. If the qualifications are tightened, there is less of a chance of a bubble building.
\nHowever, if there is a government scheme that might loosen home loan restrictions in place, there is reason to be cautious about the market. The second thing to look out for is property prices and salary. It\u2019s important that home prices aren\u2019t rising far beyond the average salary. \u201cIf the home prices rise faster than salaries, it would be a sign of bubble,\u201d says David Reiss, professor of law at Brooklyn Law School in Brooklyn, NY.
\nMeanwhile, SCB\u2019s Economic Intelligence Center (EIC) reveals that there are still no concerns about a bubble in Thailand\u2019s real estate market for this year. \u201cMost developers concern about affordability of the consumers, and home loan qualifications are still restricted,\u201d says the EIC.
\nThis article originally appeared on DDProperty.com on 3 February 2017
\nRead next: The ultimate guide to SE Asian real estate in 2016
\n
\nSource : property-report.com
\nRead more…How to spot an impending real estate bubble<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Telltale signs to watch out for Beware of the POP! Image: petrmalinak\/Shutterstock A real estate...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-42737","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-b7j","jetpack-related-posts":[{"id":3368,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/has-the-real-estate-bubble-burst-hong-kong-flat-prices-return-to-early-2014-levels-experts-say-the-drop-will-continue\/","url_meta":{"origin":42737,"position":0},"title":"Has the real estate bubble burst? 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