The clearance rates are awful. For owner occupiers it doesn't matter, if the asset devalues 10% so what, it's just paper but they still own the same asset. The only people who are really hurt in a property market fall are those with investment properties, but that's life...property is an asset class like any other, albeit usually with less volatility. Offsetting the lower volatility is that most use far more leverage than they would with shares.
You point to how lousy shares have been over the past year. I agree, on the whole they have been, with notable exceptions in the commodities sector. But like any asset class, the best time to buy is often after the biggest falls when everyone is talking doom and gloom like you are now.
If things went really pear shaped for shares from here, it would mean the economy is in very dire straits indeed. Every asset class would suffer, especially those where leverage is greatest.
For mine we'll see stagnation of property prices for a time rather than a rout, but those clearance rates were ugly. Maybe an aberration though.
