True, but bear in mind we are still in a booming economy with historically low interest rates-we are at the tip of the ice berg-thats what makes it interesting. If clearance rates at median prices are already falling back I think it is interesting to consider what may happen when there is actually some hardship/unemployment/high interest rates to contend with….

For every 'property shortage' document you can show me I can show you just as many from the 1980's and prior!!

"The extraordinary home-price boom of the past decade or so was driven primarily by the halving of mortgage rates between the second half of the 1980s and the second half of the 1990s, with the halving of the capital gains tax – and surge in property speculation – also a key driver," Robertson says.

Also have a read on 'peak debt'. Basically what a lot of people fail to realise it is basically impossible for property to continue to double every 7-10 years as is so often spouted. To finance thses increase debt has to increase exponentially-eventually it will reach a point where it just cant go up at the same rates-all the increases are based on 100 odd years of data, hardley a very long time frame…

lol wow what a sensible, value adding post this one is!!!

Geez dunno why Im even bothering responding to this joker but….

O.k virgin, Im guessing by your user name to chose to impart your valuable gem of info based on the fact you are yet to buy a investment property? A few easy to read posts for your pea brain to foloow:

a) Talking about the financial state of the economy and where it may be headed is sensible-its only ignorant, uneducated people who fail to read, learn and listen that get burnt. You seem to be in this class-dont want to hear about the other potential side of the coin? Ignorance is bliss

b) This is a INVESTMENT forum, not a warm hugs and co coa forum. Investing is business, and looking at potential deals brought about by changing financial situations is part and parcel of maximising wealth.

c) I, nor I doubt anyone would wish financial ruin on anyone. However, if they are/were silly enough to to keep informed, buy with disregard for a change in the economy, put THEMSELVES into mortgage stress, then why should I or anyone feel sorry for them? Nobody is FORCED to take out a mortage that is to big for their payroll, nobody is FORCED to spend all their disposable cash, nobody is FORCED to live a life based on credit.

d) Grow up? lol I think its the kiddies who dont want to face a looming reality are the ones who need to grow up

e) "normal people with families and who enjoy life outside money are 'F$#%ED' " No, just the greedy ones who had to have the biggest and bestest they could possibly afford without allowing for any increased costs of livings and or mortage

Yes its all that simple lol. If there is such a massive housing and rental shortage why do have to wait 2 years for decent returns? Why arnt they already there?? Of course in 2 years time interest rates could quite easily be well over 10% so your rental rates are really gunna have to sky rocket to get a 'decent return'. As for the reinvestment cycle-well yes maybe by the smart punters like you and I, but there will be a massive amount of people who wont be able to afford to finance a loan-who  knows, deposits may go back to 20% requirement?? I suppose what Im trying to say is it all comes down to cash flow, and when a economy is in recession and there is a credit squeze cash flow becomes VERY tight and people tend to hang onto every cent rather than risk loosing what little they have. Notice how in a booming economy people start believing (rather irrationally) that it will never end, that it will just keep going up. Well in a recession people also start to believe (again irrationally) that the economy will never improve. People are but stupid animals…

No, why should the government have to subsidise peoples stupidity? People are greedy pigs-its a joke that certain self interested sectors would want you to believe there is a lack of affordable housing. Geez have a look at Realestate.com-you can pick up a nice 3 bedroom house in Bacchus Marsh which is less than an hour out of the city for under $200k!!!! If people want to be choosy about where they live and HAVE to live within walking distance of the city then they can dam well pay for it. As for wages not keeping pace with increases in prices-EXACTLY!! So whats going to happen when interest rates go up even more and the country goes into recession? Companies sure as heck wont be able to afford even more pay rises….property will HAVE to drop.

No offense mate but you really need to get this notion out of your head that we are ANYTHING like europe, cos we just AINT. Nearly every single major European city is hundreds if not thousands of years old, in which nearly every single piece of vacant land has been built on, which is further followed up by dense populations in the millions. Then compare it to Australia, a country that is only 230 odd years old, sparcely populated, a entire population similar to that just of New York City and oodles of vacant land for development. Its a joke and a big con, and goes even further to proove what a disater our property market is when our affordability is amongst the worst in the world!!!

Mate you had a dig I was making up a story…

Of course there is room for more than one opinion, I just find it amusing that a PROPERTY INVESTING forum where people are supposed to view these matters rationally and in a business like manner still seem to have their pie in the sky Im gunna be an instant millionaire blinkers on.

As for apolictic-suppose it depends on your interpretation. Average house value would proabaly be around $400, maybe $500k? All we need is a piddly 5% drop in prices and people have automatically wiped out $24k of their wealth, throw into the mix the majority of home loans have been finance with 10% deposits all of a sudden you have stack of people instantly worth nothing!!

Yawn…gee how surprising….

I heard 0.9% on the radio so sue me if the announcer made a mistake-wouldnt be the first time. That asside it doesnt change the fact that we are in for one hell of a ride over the next few years-even with interest rates as low as they are mortgagee auctions are at their highest level in 7 years, clearance rates well down and we are only at the start of the down trend. Big booms are followed by big busts. To ignore the warnign signs is to be ignorant-you keep living your pie in the sky dreams gents, what do they say….ignorance is bliss???

Sorry mate I think we do. Knowledge is power-why stick your head in the sand. Already we are seeing posts from people who are finding their properties arnt worth anywhere what they paid for them, that they are having trouble seeling etc. If discussions were more balanced and opened peoples eyes to the facts that realestate isnt a simple fast track garaunteed way to become a millionaire then some people would be spared. Its funny-there was so much hype about a PROPERTY SHORTGAGE-well you can bet your bottom dollar there wont be a shortage of properties for sales over the next 2-3 years. Lets just keep it balanced instead of only looking at the positives thats all. For example-why would ANYONE be in a rush to go out and buy an investment property when by all accounts property is flatlining at best, falling at worst?

Home loan defaults rise as rates bite

MORTGAGE defaults are on the rise, driven higher by a perfect storm of rising interest rates, property prices flat-lining or falling, a slowing economy and higher food and petrol prices.