Hi Steve,

Very timely to be reminding folks of the unavoidable fact that the property market can, of course, crash here too.

I do however think that this post is very much a reflection of the changing mood in Australia. Collectively we are starting to believe that such a crash is at least possible, whereas 12+ months ago I couldn't fail to hear the phrase "property always goes up" and its analogs at every birthday, bbq and bah-mitzfa. In the last 2-3 months we have even watched the media begin to pick up on this theme. I disagree with Warren Buffet in one respect. There are a select few, who have always kept this possibility – nay, inevitability – in mind and have kept on spruiking even when no-one was listening. The Oracle of Omaha has apparently excluded himself from this bunch – but no-one should believe the "no-one could see it coming" defence when our property market finally falls, even when pleaded by experts such as Buffet.

Overall this more realistic dialogue is good news (even if it's just holding a mirror to market sentiment). What is not so good though, is that the vast majority don't seem to have any idea how big this long-running bubble is, nor of how little real productive growth is behind it.

N