Many property bulls have been lulled into a false sense of complacency after the GFC. Bragging about the bargains they picked up in 2008/ 2009, because they had nil fear when everyone else was panicking (I would say going to the well about once too often). Property prices were artificially propped up by the RBA slashing rates and the increased First Homers Grant. The decision to buy alleged bargains (invariably these properties would be negative cash-flow) in 2008 may or may not be wise (I would suggest the later). The outcome will be known with time. If we do enter a GFC round 2 /recession, then the pain will be significant and the trouble will hit when many buy at say 10-20% discounts believing this is the "smart" thing to do, as judged by property prices movements in the original GFC. As I have stated before 2011 is the year when the 1st baby boomers (born 1946) turn 65yrs. Income drops as does the marginal tax rate, hence less incentive to negative gear and less income to prop up negative cash-flow properties. Things have changed, demographics all but guarantee this.
