Bassyabbie, don't bother with the REIV stats even for laughs.
As you well know when a price bubble burst it's bad enough. But it's infintely worse if it was based on a lousy myth of "chronic shortage" indoctrinated into the minds of the gullible over many years (who in turn parrot the same garbage to one another wishfully) when in reality there is a "massive glut" with yet more new stocks entering the market.
The rate of supply (and timid demand that seems to be getting weaker) in Melbourne can be likened to a rapidly rising dam about to burst. Put oneself in the shoes of a propspective buyer (speculator) and you wonder who in their right mind would even waste time attending auctions where propeties pass-in on vendor bids (at some fantasy reserve price) ?
The whole Oz housing bubble was fuelled by investors or speculators (not by first home buyers or up-down trading dwellers). Hence, the fate of the Oz housing collapse is a function of the behaviour of speculators going forward.
Some say rate cut at this phase is the equivalent to the proverbial "pushing on a string".
As seen in places where properties crashed violently and where prices are still skirting the bottom many years later despite hyperinflationary 0% interest rates, a few 0.25% cuts from the RBA won't offer any help to the housing market.
Also once bitten twice shy, too many are now aware of countless victims (those pooer FHB) who got sucked in after the GFC rate plunge are now paying the price for the poison lure.
People are fearful of losing their jobs and their debt exposures built up over time. Families are frantically trying to repair their balance sheet. The hordes of property speculators nation wide who elbowed one another for a piece of the speculative action have now turned into an army of sellers competing with one another for the exit.
You can only reflate something so many times. A bit like a recharable battery, eventually it will go flat after 60 seconds after a full recharge.
The credit story has 2 sides of the tale.
There is the supply side and the demand side.
When demand (appetite) for credit is gone, cutting the cost of borrowings just creates slack when there is no pull.
An analogy is if you force feed an anorex. The food will just end up on the floor no matter how much it is chewed, munched and regurgitated.
