So we have to guess when the merry go round of cheap debt and government stimulus will slow down/stop?
I certainly wouldn’t argue that that is one of the variables/known unknowns that will be a factor in a reduction of the bubble.
There are many more factors to consider though, quality of realestate asset, position of property or abundance of similar properties available at the time. As I’m sure you understand, eastern seaboard areas like Melbourne & Sydney with their good runs over the last decade or so are in a position to cop a bigger flogging than the capital cities that have stagnated already, country towns/cities with good infrastructure, amenities, employment opportunities and cheapish properties should/could even get a boost if metropolitan areas plummet? Another consideration is that some wannabe homeowners/investors who are struggling to take the first step due to a rising/high market price now will take advantage of a correction. Yes some will still struggle but some will reap rewards at the expense of those who are over leveraged in property or those who have their capital tied up in their PPR as a way to minimise their tax in retirement.
PS I wouldn’t like to see a 20-30% drop in my realestate holdings considering I’ve recently taken a 40-45% reduction in the value of my business but that doesn’t change the fact that every cloud seems to have a silver lining to someone.
