What does the  "FHOG stemulus"  has to do with almost $3M apartment having to drop $750k before selling ?  Surely there can't be that many  FHBs who can afford apartments selling at 5x median home price and the ones that do would not be put off by the loss of a lousy $7k  in "FHOG stemulus".   
And as far as the overall 0.2% fall in the median prices go I think the picture said it all and is the reason behind the fall .

No tax l expert myself but  don't see how you could claim it on tax as an investment but give away the proceeds received from it to your brother without declaring it on your tax income .  Unless your brother was a ATO recognized charitable institution which would allow you to claim it under  tax deductions for donations to charitable institutions because the property is in your name you have to pay tax on any profits received from it, , whether you claim the expenses or not.
Perhaps you could look at employing your brother as your personal property manager and have him charge you fees equal to the rent you receive for the place ? 

Only wished you listened to reason 2+ years ago and did something like that in Sydney or Melbourne over 2 years ago so you'd be up 100k+ in CG, a couple of fat tax returns and the rental income covering the mortgage repayments by now.  Still you know what they say, ' you live and you learn' and 'better late then never'.

Only problem with that is the nice coastal towns will be overcrowded coastal towns in 20 years time and meanwhile the rental returns won't be as good as something in the major capital cities.  Wouldn't the better strategy be buying  a lower priced place on a larger block closer to the CBD that gave you a better rental return and then selling it to buy a place in a coastal town that will still be the "right coastal town" in 20 years time when you actually want to retire ? By then you may change your mind and want acreage in the hills instead of a beach house in some overcrowded town. 

Australia is not one uniform property market, there is always the right time to buy property somewhere.

what does unsold properties have to do with under or over supply  ?  Is there an oversupply of Toyota cars if there are unsold Toyotas in a used car dealers yard ?

Must be a low demand area, most rents in the metro areas have gone up over the past year.

Depends what you consider recent.
Australia being a young country only allows us to look back a couple of hundred years but boy how I wish my great great great grandparents bought me a few acres of land around Sydney Bridge 200 years ago. 
Of course there probably wasn't much capital gains to be made between the Roman times and a couple of hundreed years ago so in that respect you are 100% correct about property being the winner only in recent history.

Hello old friend,
Your 2 years are up and the forum is still running but your 30 % went in the other direction. Want to make play double or nothing, say 2 more years and 60% falls ? 

Better rush and get some then, before they are all gone.

Or did you mean that 2012 is the year you finally give up the wait for lower prices and buy ?
 

As is the assumption that rents will stay flat for the next 5-10 years. That 5% yield will soon turn into a 10% +ve geared property and any capital gains the icing on the cake.   

Even if it does eventuate it may only do so after the prices have gone up a lot.  Someone who has been waiting for a 30% crash since prices were a third of the peak is still going to end up worse off. He would also be reduced to choosing  from a limited number of properties since most sellers would refuse to sell so low and simply withdraw the property from the market  until conditions improved.