One other thing fWord, we get bombarded with claims that prices always go up, and advice that if we don’t buy now, we’ll be priced out forever – from the media, from the property industry, the banks and even from friends and family.

You might not have declared your beliefs but everyone else has! So I think it’s unfair to ask us doomsayers to cop it on the chin and keep quite.

fWord, you said: “What’s so ridiculous about that?”

It is possible to have a view of where the market will be in the future while understanding that the market isn’t there yet. Think of it this way, if you think your investment property will double in 10 years, would you try to sell it for double NOW?

You said: “Well, I’m no expert. However my opinion is that even the government would be playing lap dog for the banks and doing everything they can to prevent house prices by collapsing in this manner. This is because if the property market crashed the effects would be widespread and the folk that are rubbing their hands in glee and waiting to buy bargain houses will not even be able to get finance to buy.”

I don’t doubt the government and RBA will do everything in its power to keep the bubble alive, but like every government around the world, they are powerless to force people to spend in a falling market.

You said: “More to the point: if the property crash did occur, these same fence-sitters would be spending the time making water in their pants rather than taking action to buy.”

Probably true – which is why the downturn will be so severe.

You said: “So these doom & gloom soothsayers will do nothing during a property crash. Prices eventually trend upwards again because people with some guts will buy, and these same soothsayers will be complaining again during the next boom. In effect, what have they achieved? They essentially watch 7-10 years of their life drift by and they are STILL left with nothing.”

Depends what they’ve done with the money they’ve saved while renting.

You said:” Besides, do these soothsayers realise that they too, would probably lose their jobs when the property market crashes, and as you say, unemployment rises? All I can say is, be careful of what you wish for.”

I believe the crash is inevitable so the longer the government tries to prop it up, the worse the pain will be. The crash isn’t the problem – it’s the (albeit painful) solution to the problem of rising house prices. A bit like chemotherapy is to cancer. So I do wish for the crash to get underway, but I can see that it won’t be pretty.

You said: “So often we read about home ownership being a ‘right’ that everybody has. Frankly, in today’s world, I’m not sure what ‘rights’ there are anymore. There’s certainly more ‘wrongs’ than ‘rights’ as far as I can see.”

Not sure if you’re referring to other posters but I certainly don’t see home ownership as a right.

Your comparison of a $200k house to the average rent of $360 p/w might have been a bit misleading. The rent on that $200k place would be more like $150 p/w.

Finally, your last example seems to highlight just how over-valued property is, how much property investors are losing, and the benefit of renting. So I agree with you there!

Why so angry DWolfe?  You’re surprised I haven’t done much to pop the Aussie housing bubble?  You must think I’m more powerful than I am. I’m not looking for hand-outs or a free house – no idea where you got that idea from.  I don’t ask for anything from the government.  In fact, I’d be happier if they stopped the hand-outs, butted out of the housing market altogether and let it correct itself. In the meantime, I’m happy to sit on the sidelines and not get involved in the mania.  I guess it’s just a bit frustrating that housing affordability was the number 1 election issue and the government responds with policies to keep prices high.  In addition, the longer they prop up the bubble, the more painful the inevitable burst will be – which is in no-one’s best interests. p.s. did you enjoy my blog DWolfe?

Good post Wynyard and I appreciate the sentiment. But I don’t see the point in trying anymore – the government is not interested in making houses more affordable because it would upset too many voters and cause some short-term damage to the economy.

That report you linked to highlights the fact that the First Home Owners Grant only increases house prices, so what did the government do? Double it.

I’ve resigned myself to the fact that there’s nothing that can be done, except wait for the bubble, sorry “severe shortage of affordable housing” to correct itself.

Fair call Dan42 – that was a fairly abrubt entry into the conversation.  Regarding your request to narrow down the date, my guess is as good as anyones.  But if I had to guess, I'd say the peak was June last year and that we'll have falls of 40%+ over the next 7 years.