sixty minutes, page-96

For an individuals family home, people do not make spreadsheet calculations to determine whether to sell or rent and invest the proceeds. He is proably single and therefore able to move with out effecting childrens schooling etc.

There will be instances of 40% or more falls coming from investors caught between out ie unable to pay and poor souls who got in to deep and should never have bought. However, this will not be wholesale. noboby will want to crystalise a loss

For families, if they can afford the monthly payments they will stay put as the moving costs, cost of rental, disuption to the family etc far out wieght the benefits of selling.

accoridngly, while there will be bargins they will not be like in the US which has 12m or more houses for sale.

As to the arguement if the price of houses comes down so does rent is wrong, actually rental demand increases as people hold off buying as for first home buyers it is cheaper to rent. If there is capital growth then there is an adjustment to the returns to compensate.

The problem with our professor he beleives that markets all behave according to his ecometric model. As we know that aint the case as there are other factors which are not able to be reflected.

The Hong kong market is an example where for a number of years there was a a lot of negative equity in housing, however, people continued to pay their mortgages knowing the market would turn around and it did. What was effected was consumer spending such as resturants and the personal luxeries as people adapted to pay off the mortgage.

If something was going to falll 40% or more it is the Harvey Normans of the economy.

Most of the people that have families are not complating selling but raining in costs to pay off debts.

Were the bargins will be, will be in development sites for residential as these were signiifcantly over inflated to reflect a rising market but with no demand, have dropped significantly in value. the only risk is to be able to fund the holding costs for 5 to 7 years before the market turns positive.