I seem to recall back in 1991 that no-one thought property prices had crashed.
In Melbourne prices were on a gradual decline from 1989 and some who had to sell took 30% hair cuts.
At no time did anyone say it was a property crash, after all, in 1989 the talk was of average million dollar prices in a couple of years (sound familiar).
But, looking back over the period 1989 to around 1994 a clear downward trend was obvious. Many 'stressed' suburbs of Melbourne took 30% baths. Negative gearing was a shambles.
Thanks to lowering interest rates and improved employment outlooks once Howard took office things improved. First home buyer grants post GST and subsequent stimulus kept the ball rolling.
So where are we now? Well, we have a generation of property lovers who think that it only goes up. So do their parents.
Its been the biggest property boom in history. For many players its akin to sitting at a pokie machine and ringing up jackpots every spin.
So where to next? Well there are plenty of middle to outer suburbs in Melbourne where you can buy a nice three bedroom house for $800k. These same houses eg. Doncaster, Templestowe, Glen Waverly, Keilor, Box Hill et. al used to sell for around three times the average wage ie. you could buy in Box Hill in '93 for $120k or Templestowe for $140k.
So why are you paying more than ten times your income now to buy these same houses? Bubble?????????
