crane index, page-467

You seem to be focusing on the gamblers of the property market rather than the investors.

The investor buys property and reduces risk by taking into account average interest rates which is around 7% as to allow for the flexibility of in repayments in lower interest rate environment the investor maintains repayment at hire rate to reduce borrowed capital allowing more margin down the track for rate increases.

The gambler will buy on emotion and sell on emotion but the gambler may represent 10 or 15 % of the market and usually don't bye prime real estate in prime area as usually they are priced out of that market sector

A classic example
I was recently to an auction in the suburb of Fairfield in Melbourne , the property sold for 2.1 +million most of the ill informed walked away not believing the price , yet those who had actually done their homework knew exactly why it sold for so much .

The area within a block distance of the train station has been designated for high density development and in the last weeks has attracted another large developer and if the whispers are true has offered in excess of 5 million for a retail premises and large car park to develop a 5 story multi apartment building.
Those who bother to do the home work will profit the rest will gamble