"Just becoz it has been good investment for last decade(due to credit expansion) doesn't garantee it will be a good investment for coming decade." - If you are only basing you argument on the last decade then you better go do some more research
"But all this will, at best, stagnate the house prices for years to come." - that is a far cry from 40% drop.......
"I wonder what happens if australia decides to peg aud at let say 0.8 usd :) (ie OZ's entry in upcoming currency war)" - are you seriously suggesting that the Oz gov would peg our currency???
"My point is, In current Australian economic environment property investment doesnot provide favourable risk/reward ratio." Again, a far cry from 40% drops, just say that you don't think it is a good investment, quit with the doomsday crap.
My 2cents; I have been hearing that property prices are too over priced for over 15 years, and it is the same as now, no different just different people.
In that time no one that has a bought a property in Oz has lost money. Some that bought poorly may not have made much after interest and costs but very few have lost money.
I have had an investment property within 10k of the city for 7 years and I have done ok, not outstanding however (once ALL costs are taken into account) and I am not for one second saying that it is a pot of gold without risk. But neither are shares, race horses or art collections. Then there is cash which after paying tax on your 5 or 6 percent barely keeps up with inflation. So people need to invest.
As above I have property but I also have shares and cash.
Best performing in my investment history - shares, then property then cash. Would I put it all into shares? - not a chance. Property must hold some place in a balanced LONG TERM portfolio.
