Just too many Australian's have been trading houses like a commodity and using highly geared leverage (mortgage equity) so even a small decline in prices would see a flood of investment properties hit the market. Booms unfold over years until the final fools enter the market, but busts occur quicker as smart sellers exit the market first then the rest panic sell in a desparate attempt to delever debt. It's already starting to happen in Victoria with a flood of auctions due over the next month. And with plunging housing finance figures and falling sales & auction clearance rates there will be few buyers (fools) left. It seems we've finally reached the tipping point. Mermaid Beach merely became an early warning sign, but the mania was nationwide.
