real estate never goes down, page-30

zen, I think you are overely pessimistic with your figures.......26000/.05 =520,000 is roughly where the market is at..........but they almost never use whats called the cap rate for resi housing.........its used for commercial property more often than not
you compare the mv to the low risk asset you would have in a cash deposit.........cash deposits 24 hourly average about 5-6% this past year........term deposits for a fixed term were about 6.5-6.85 lately.......
the saving cash rate has no capital gains in the low risk at 6.5% so to compare apples with apples, you need to use a margin to allow for the capital gain in resi market.....
hence the .05 gives a more realistic rate
cheers