Bottom of the market for fairly new houses should be somewhere around when house prices reach the following:
1. Land Value includes only the taxes and infrastructure charges included in the land value (Cost of land stripped out), plus 2. Cost of construction excluding builders profits (assumed at 30%)
This represents the theoretical price point at which houses are effectively valued at a cost which excludes any potential element of overvaluation in either the cost of land or of construction. Anywhere substantially below that value will be because we have reached the panic stage and short term supply/demand factors are overwhelmingly influenced by the result of market psychology despite the fundamentals supporting a higher value. That is when I intend to start buying. Markets always overshoot on the up side and the downside so I expect it to turn somewhat below the above mentioned price points.
