MrSteve........yep, I also think houses are overpriced. I had a...

MrSteve........yep, I also think houses are overpriced. I had a terrace in the inner west of Sydney. I reckon the land value ( 120 sq mts) would be around $300k ( which already seems outrageous imo) & the building around $180k tops (4.2mts x12mts + 2 beds upstairs) So that makes the total value of $480k, or even round it off at $500k. It sold for $620k. & that was just an entry level house in the inner west. That was the normal price for this type of house at the time. Go figure... IMO the reason houses sell for these prices is because ppl are prepared to pay that much for them. The prices are what the market will bear. It can't all be supply & demand cause there are thousands of houses in the burbs of western sydney & some still sell for upwards of $600k. People keep saying house prices are too expensive but they are the ones setting these prices. House prices will come back to a realistic level when ppl stop paying these crazy prices & banks stop using unrealistic valuations & stop offering ppl bucketloads of dough, then vendors will have to reduce $$$. I honestly don't know how a 40% drop will be achieved though. Be good if it would, my kids might be able to buy then...cheers