Quick Definition

A housing bubble occurs when property prices significantly inflate beyond their intrinsic values due to high demand, speculative trading, and easy credit, eventually leading to a sharp decline when the bubble bursts.

Examples

• 1During the U.S. housing bubble of the mid-2000s, home prices soared due to low interest rates and lax lending standards, only to crash dramatically in 2008, leading to the Great Recession.
• 2In cities like Vancouver and Sydney, foreign investment and speculative buying have periodically driven home prices to levels that many local residents cannot afford, creating bubble-like conditions.
• 3In tech-heavy regions such as Silicon Valley, housing prices have spiked as high salaries and tech booms increase demand, often outpacing the average income growth and leading to unsustainable price levels.

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