why are we in a recession, page-2

all things being equal, lower interest rates will help property prices, nevertheless in a falling asset price environment buyers will still be reticent to pay the same kind of prices we saw in the past. I went to a presentation this morning by Platinum Asset Management and they were saying in past bank crises, the average property value fell around 35%.

Now Australia's banking system is more robust but we don't live in a vacuum. His main point is that incomes are what matters for long term property values and demographics, location etc play a much lesser role. On that basis Australian property is due for some pain, particularly if unemployment kicks up towards 7% as is the consensus.