I think she's right. People have and will stop leveraging...

I think she's right. People have and will stop leveraging themselves to the hilt, using equity and speculating and begin saving or paying off debt instead.

Even to a fool this translates to less buyers willing to take less risk. Add the boomer generation likely to become net sellers rather than buyers in the years to come, and the fact that banks are less free with their credit, it says to me that house prices are going no-where best case for some considerable time.

Current prices, levels of debt and investment strategies I believe are based on the expectation that property prices keep going up. Although it will take a while to sink in, when finally accepted, this will result in another pillar of support being removed for the existing price levels.

A guy at my work here with 9 investment properties worth well over 3 million, some in mining towns, most of them positively geared, was just refused a loan to buy a PPOR, he needed I suspect about 1 mil. He's currently renting. Had he sold these 5 years ago he claims he would have had capital gains of some 1 mil plus. Now he reckons would be about $300k.

How can the prices keep rising if there's not much money around to pay current asking prices.