Property Price Boom, page-5

U can never tell bo. You might want to consider real v nominal prices. You also might want to consider the influx of fickle investors into the market in the last 24 months and the higher level of indebtedness than ever before. The comments of the RBA and other economists are premised on the basis that there are factors in the current property market which are at play which were not so prevalent in the last boom making the market more vulnerable than ever before. You might note the discussions in the papers are about whether the market has stabilised or will fall and by how much and over what period of time. No one talks about it going up any more, bad sign big bo! Likely scenario is a steady deflationary scenario over a few years 0 to -5% PA in real terms (ie compared to other prices in the economy including other asset classes) and perhaps even in nominal prices. The imbalance between yields and prices will be redressed on the asset side slowly. Remember people dont sell they hang on, but what if you want to move or a property is in a deceased estate, there are always sellers but are there going to be any buyers now the banks are pooping themselves about the lending books they have written and lending policies are tightening