I don't think panic will set in m007m. I do agree that prices could fall by up to 25-40% but it will be like a bull in mud who thinks it is alright, until he realise the mud is quicksand. Long and slow process, as the saying "as safe as houses" is something that has been ingrained into the aussie psyche for 40+ years. Also unlike the US, our laws don't allow for an easy defaulting of the mortgage, so people will be less likely to just walk away.
Real prices might not fall by as much as 40+%. Perhaps 20-30%, but with inflation factored in and failed opportunity costs/profits, then real losses will add up over the next five to ten years. The silent crash..
