What would/could the government do, if anything at all, in the event of a 20% price fall over the next 12-24 months?
For example, say Steve Jones' buys his first home this year out at Craigieburn in Melb's north west, purchase price $385k, has a loan of 340k, his home is then valued at $310k his repayments are most likely rising on his variable loan along with the creeping cost of living.
-What are the chances of Steve making inroads into the principal of 340k@8% on his 50k a year wage? -Steve has his capital tied up in this property for at least 5 years before he could afford to sell up.
Asset deflation. I personally hope it's a slow process over a 3-5 year period so that we the taxpayer's don't have to fund some crazy "first home buyer bail-out package" to keep these guys afloat.
