Hi Joker Looks like we are prety much in agreement that the pot is not boiling anymore but it is still simmering quite strongly. My view is that at least some money flowing into real estate came and is coming from investors getin out from falling stock market. That is stil in down trend in my view and likely to get worse before it will get better. I also have problems with the rent values versus asset values but I think that people invest in Sydney and Melbourne mainly for capital gains with the rent income being only secondary consideration. There are people who do not need more income now but capital gain is tax free and compounding until you sell. If anything, their atraction is negative gearing as some of these confused souls think that it somehow makes them money. There is something magical about getting a refund cheque from Tax Office even if you spent double to get it. You are right that there are always deceased estates and people moving out. But there are also people moving in and first time home buyers so generously subsidesed by tax payer. This evens thing out in my view. Unless we get get a serious recession a la GB during Thatcher days or Japan and HK with their hugely overinflated real estate prices, the downward pressure on real estate prices is likely to be minimal. That is my considered opinion and I am sticking to it until furter notice.
