If your talking Australia. Definately wait. Property prices are due for a massive correction IMO. Retirees are getting nervous. Those who have lost big time on the market will think about selling their investment property/properties because they have seen big capital appreciation in recent years and think getting out now before property prices fall in the next couple of years is a good idea. If I was in their shoes, I would be thinking of selling to lock in some gains to offset losses on the market. Remember, many of them do not have the time to wait for a depression style rebound. (This is what my parents/in-laws worry about).
Also, it is likely that unemployment will increase next year and those who are overleveraged will add their houses to the already saturated market. These two factors (as well as the bubble bursting in other countries) will affect buyer confidence dramatically. On top of this, banks are becoming even stricter about lending, essentially locking out first home buyers of recent years who could at least buy a house without a deposit. Banks will revert to asking 20% deposit at least. Mortgage insurance will be a thing of the past IMO.
Don't forget, there has been massive increases in property since the late 90's. A fall back and even overshooting the long term average is very likely.
Real estate agents may talk about the differences between Australia and other countries because of our low vacancy rates. Sure the US has more housing than it needs but the UK does not. Their property prices have collapsed more than in the US mostly because their income/mortgage ratio was higher. But guess what, Australia is worse.
I hope I am wrong, but if I was a buyer, I would definately be holding out until the global economy stabilises. This may be longer than many anticipate.
