Property prices are determined by what somebody is prepared to pay. So if a couple – who really want to stay in a particular area – are prepared to pay a ridiculous amount for a Queenslander, this purchase pushes up the valuations for the entire area !!!

Later, the next sale in the area expects the same and more and so the vicious circle of real estate is born ;-(

Now add an auction to the mix – with a little emotion on side – and the property prices skyrocket even further !!

But wait that’s not all.

Rates are tied the property’s land valuation. This last week, the rates in Brisbane increased between 9 to 60 percent depending on the land valuation. After a week of criticism by owners, Lord Mayor Campbell Newman defended the rate rise as needed to fund the Brisbane city capital works programs.

This increase also affected residential owner occupiers and property investors differently.

Obviously, investors will push up the rental to cover the increase in rates. This will put even more pressure on tenants who’ve already had to bear two interest rate hikes and their effect on the weekly rental.

Property prices keep going up. Interest rates and property rates go up.

When will this madness end?

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