You keep forgetting the power of leverage. There are some properties on the market in select suburbs that are good value, and if your income is high , and you can negative gear at the highest marginal rate , and have a 10 year perspective, and can borrow 100% on your other equity - the bank carries the risk! Some suburbs in Perth, good ones are still doing very well despite the general downturn.
Cash in the bank this year will go down 10% at least because of inflation! Can't you see that - it is not that clear cut. Perth is rolling in money - yup rolling in it.
Put cash in bank interest at marginal rate plus inflation loss is a certainty. So a lot of people will take the calculated risk and buy real estate in select Perth suburbs and believe it or not are making money. If they don't so be it , it is a forgiving asset in the longterm particularly if a good suburb. Sorrento on the northern coastal strip has moved dramatically recently and if you don't get in now with some of these suburbs you never will with the dynamics in this state.
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