wages, page-8

Rents started falling first too in the US.

Cycle seems to go:
-Interest rates drop or money becomes easy
-Rush of investors taking advantage
-New buying presure push's prices up
-As prices go up buyers get priced out the market and forced to rent which fills the extra rentals being bought
-Price ceiling gets hit when Wages restrict future price growth
-prices get irratic (like now)
-People start to struggle with debts (like now)
-jobs start to go making it worse (like now)
-number of house's for sale increase above average (like now)
-number of auctions inrease (like now)

-Something then triggers a big sell off
* Interest rates rise
* Enemployment levels falling
* renters struggle with payments hurting investors
* Too much time without capital growth
* or Some other trigger

-Investing in housing loses popularity which means less investors with bigger buying power buying, and more FHB's with smaller buying power.

-Hose prices start to tumble
-Rent prices start to fall in line with house price fall
-Investors start losing money as borrowing costs go up as rental income falls.

-Then even bigger sell off starts and correction come into play.

-Banks start losing money on defaulters that sell below buying costs.

-Banks loan book starts to look risky as loans are larger than a lot of the homes purchased.

-Lenders to banks up interest rates to factor in risk.

-More people cant pay their mortgages..

and before you know it, prices are back to reality, where everyone can buy again..