Does boom equal bubble? Not always. Here are the facts

Australia's housing market continues to perform extremely well with strong growth causing some buyers to question whether it is in a bubble - So let's have a look at the facts.

First, Australia's housing market has been on a clear recovery trend this year. Market transactions have barely slowed down over the holidays this year and the market is doing above expectations with new listings in Sydney up almost 14% year on year and up 30% in Melbourne. Let's find out what exactly are the reasons behind the continued rise in house prices.

The Australian Federal Reserve has made it clear that it will keep interest rates low for the next 3 years after reducing them to 0.1%. It also has plans to double its QE funding. This will most likely continue to drive up asset prices across Australia.

The large number of fiscal policies provided by the Australian government to fight the downturn caused by the pandemic has also been a major reason for the stable housing market. Policies such as tax allowances for first time home buyers and interest rates at all-time lows have all played their part.

From a homebuyer's point of view, these policies have all been helpful and overall has removed many barriers for potential homebuyers. As it turns out, there really isn't much truth to the fears of a housing bubble in Australia. The gap between who owns a home and who doesn't is growing instead.

The unique position of Sydney's housing market is in fact attracting buyers from all over the world.