I think houses are a poor investment at this point in time, but I would still like to ask how you think this 40% fall in prices is going to play out. The fact that houses are overvalued doesn't necessarily mean a price crash is imminent. Otherwise bubbles would never be able to form and prices would always be at the equilibrium. To predict an imminent crash you need to predict a catalyst for the crash. I think rising interest rates will put downward pressure on house prices but I'm not predicting a dramatic crash because of it. In fact, I can't see how house prices could fall 40% quickly in a country with recourse loans unless the economy deteriorated very rapidly and unemployment became very severe. But at the moment the economy is looking okay and it's possibly improving(despite the worrying debt levels).
