I always find these discussions laborious because of the basic motivations of posters.
You see this again and again on Hotcopper.
What posters should do is to take an objective view of data, examine contradicting opinions and form a view once they have a ton of understanding.
Of course that's not what people do. What people do is they start off with what they want the situation to be and then they hand pick data to support the outcome they want and ignore anything that threatens that conclusion.
To what end? Is it comfortable to live in a fantasy? Does it make you any money? Does arguing the case with anyone who wants to listen change the outcomes?
I am willing to bet that 99% of the property knockers on this thread (50% drops coming - what a joke) are people who look at successful property investors with envious eyes.
So what's the hope boys? If you say it loud enough and often enough somehow it will come to pass? Even though it has NEVER happened in this country and all empirical data suggests the opposite, somehow if you cross your fingers, close your eyes and make a wish it will somehow magically occur?
I suggest you sit down and have a good long think about fundamental drivers of property prices. Try to understand why the prices have risen and risen and risen in the face of people screaming how prices CANNOT rise any further.
Once you understand what sets prices you may be better at forecasting movements. You can read back through some of my posts if you want my thoughts on fundamental drivers of property prices, try to do it with an open mind, try to assess the information on its own merits instead of ignoring it all and predicting the wishful-thinking you started with.
I'll give you a tip. Property prices are not set by "sentiment, they are not determined by a central office of price fixing, they are not set by lying real estate agents, they are not determined by tax laws.
Real estate prices are set by demand and supply of land. Simple as that. Do you see endless empty houses? You don't? Well if you don't why do you think prices will drop?
What I see is 70% of houses occupied by owner occupiers who will sell the family home as a last resort. I also see that the other 30% of houses which are occupied by renters are in great demand.
Currently, roughly 1.5% of rental properties in the cities are vacant at any one time. Some suburbs are more some are less but we are talking averages here.
So 70% of homes are occupied by owners, 98.5% of rental properties are occupied. Immigration is higher than ever, we recently had a baby boom reported as women in the late 30's and early 40's gave birth.
Why one Earth would you predict a severe drop in prices in this environment?
In closing let me say that the people forecasting steady as she goes and even property rises seem to be people who have actually invested in property. I am will to bet that 99% of those forecasting a drop have never invested in property.
So you have the experienced (and successful) arguing with theoreticians with no practical experience, who's likely to get it right?
