There are many factors here which may prevent sudden and large declines in property values. As it stands right now we don't have the conditions in play to see a decline in property values across the board of 30-40%. That doesn't mean these conditions won't arise in very near future, think five to ten years....or that they can't arise very very quickly. Personally the biggest risk i see is to first home owners in the under 500K property spaace.
The fact that property may not "crash" doesn't make it a good investment right now. It's at all time highs and unaffordable to many. Prices may stagnate for a long time until everythign else can catch up, or we may see slow declines in values. Either way is anyone really expecting double didgit growth?? Even if that did happen how sustainable would it be??....in actuality it would make a "crash" more probable if property somehow managed to achieve high growth in the next five years.
We need prices to cool down for the sake of the long term health of the economy.
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housing cycle on flat terrain before long, slo, page-5
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