property bubble confirmed -finally, page-50

"As for 20%-30% drop in property prices, this definately needs some qualification."

Read the economist. Where is the qualification that they will continue to rise, or even stay stagnant. History shows when any asset that has supply that is less elastic than demand, and a sudden increase in demand (which no-one can deny) it causes bubbles that eventually need to burst.

"It is far too general to state that the market price will drop 20%. High-rise units I have no doubt, but no way in Melbourne is the average house price within 15km of the city going to drop"

they will when new buyers move to the apartments that have lost 40% of their value and become cheaper to live in than houses.

" at least not with continued low interest rates and relatively strong economic growth. "
If you don't realise how dependent we are on the US and global economies


"10 years of stangnant property prices from the late 80s has to be taken into account and as Grant says, the Economist has taken a graph to suit their argument."

This is confirmation bias in its worst form. The Economist provides some 50 reasons why the property market in these 6 countries is headed for a fall. Yet you find one statistic that can be considered questionable and you disagree with the entire article. cmon... please.
What do you think every sales agent does when trying to flog off an overpriced investment unit. Every growth statistic ever given includes property price rises during years that had very high inflation and interest rates. They say you can expect similar gains to these years but when calculating affordabilty of repayments they assume that interest rates will remain as they are for the next 30 years! If you cant see the problem there I'd be worried.

"No, in my area, I can't see property prices dropping 20%. "
No-one ever can see a bubble bursting until its too late. Its always different in my area/this time/due to immigrants. You can bet the other countries the economist referred to are all saying "it will definitely happen in these other countries but not in ours, i just can;t see it". But thats right Australians are so much smarter than those in other countries aren't they. Just have a look at the people buying property at the moment with greed in their eyes and fear of missing out on the best investment since internet stocks. They don't look like astute investors to me.

"You can argue it will, but you need to qualify the area of Australia and type of property you are referring to , as it is silly to group every property in Australia into the same bucket."

Ive never said all properties will fall by 30%. I've said in past posts that some will fall by 70%, some by 40% some only 10% and some will gain 10% - but the average property will fall 30%.
Anyone holding a portfolio of property should expect to see big losses. You'd want to have at least 30% of current valued already paid off or watch out.