Baron1 I too live in WA, personally I think the housing market...

Baron1 I too live in WA, personally I think the housing market in WA will be hardest hit in the outer "new" suburbs and not so much in the inner suburbs closest to Perth. If they say say there may be a 30% drop in housing prices it will be more like 20-30% outer suburbs and 10-15% inner suburbs. We can't forget that the UK back in the 80's suffered massive negative equity on property prices when they went south and it took them a long time to recover. Negative equity is a real possibility here with many people borrowing 100% of property price. If you have the coin it could be a real buyers market. The mining boom in WA has insulated us somewhat and it will continue to do so until it busts.

The housing boom we have recently experienced has created a false sense of wealth for many and being in the finance industry it is horrific to see how many people have utilised large amounts of their "paper" wealth "residential property equity". Without this false sense of wealth driving the economy over the past 5 years I think the state of the Australian economy would be different. If the housing market does go pear shaped I think it will be enough to rapidly slow the economy given that the masses in general are over committed financially.

Agree or not but we are in a tug of war at present with the bull on one side and the bear on the other. The dynamics of the Worlds economy has changed radically. Bottom line is everything we do is dependent on energy and all the past figures and graphs mean squat because they were based on the abundance of cheap energy. Unfortunately we have used it and the cost of energy now is expensive. The supply of it can not keep up with demand and this situation will expedentially get a lot worse with China and Indias growing consumption. The great consumer itself America will suffer the worse and it will be their economy that goes belly up once the cost of oil hits $100 a barrel and beyond.

I personally think we are living in dangerous times and I am very bearish at present but bullish for a bargain.