"a drop in property values of this magnitude would be a disaster for the whole economy and would assist no one"
I don't think it would make that much difference. A house is a house. A house that cost $1 million and then falls to $200,000 is still the same house. It's just a bit cheaper.
If people are hocked to the eyeballs all they have to do hand the keys back to the agent as they did in the US and get another house.
The only one's who'd suffer would be the investors. But nobody could care less about those stuffed shirts. In fact I'd say a lot would remember times they had to listen to them brag about how many properties they had and if they lost the lot, they'd probably would say "beauty!".
In anycase, it is there fault that housing prices are so high in the first place. They were the one's who borrowed money and bid up the prices in the first price.
