Here is another one who was expecting the prices to stop rising...

Here is another one who was expecting the prices to stop rising last year. In fact i bought my place two years ago to the day. The real estate boom was already under way and I was wondering if I was paying too much but the rule of the thumb that the total price in thousands should roughly equal to weekly rent in dollars was not broken at the time of my puchase E.G. $210,000 unit in Metro Sydney used to get approx $210 a week in rent. The prices have risen about 20% since. There is some anecdotal evidence that they were a bit higher but come back some. Since about January the Sydney units are bit harder to sell and stay on the market for a while unless the price is right. People in my block were selling a unit similiar to mine and stared at $290,000. Six week later they droped the asking price to $275,000 still no sale. Finaly month latter the unit was advertised for $239,000 and sold within a week (it was a deceased estate and I guess they got sick of wating for the money). Hence the 20% etc.
As to buble bursting and prices crashing my view is unless the interest rates go up to high too fast we will see the ral estate market flatrather than crashing. People will first stop spending on luxuries and go out less and at this state all the shop keepers will start screeming blue murder and economy could slide into recession. The Reserve Bank knows this very well and so they are likely to err on side of caution. If not there will be some real estae bargains with economy in recession resulting in job losses and some forced sales.
I would not buy any real estate in Metropolitan area anywhere at the moment the stock markets are recovering ( I think) and the tide is shifting from real estae back to shares. That is how I see it but I do not work for the Resrve Bank and of course anything can happen to alter the future. Can't find my crystal ball, sadly. Bohemian.