well there isn't just 1 straw. That's the whole problem. If there was 1 straw the problem would have been fixed by the government or RBA already. First, it's global. Second, unemployment and recession is a result of the housing crash, not the other way around. This has been proven in UK / USA / France / Spain etc.
Many companies are depending on the strong housing market. Banks, mortgage brokers, real estate agents, building companies are the obvious ones. But there are a lot more. Think of your baker, your grocer, that small IT company accross the road, all the small shop / company owners basically. Many of them used equity to finance their shops or businesses. If their equity disappears or goes negative, I could see a few tumble.

A fellow forumite on this forum ( I believe he's an accountant ) reported that a cash flow positive company has gone bankrupt because of their profits going directly into their house repayments. I see this happening more and more as the interest rates reset.

Then there's the limited credit availability, new laws upcoming for more liquid money in banks which will drive up available credit prices more. This will be reflected in the interest rates, which is why I am quite sure the interest rates will keep going up to at least 12%. The RBA has been factored out. If banks offer 8.7% savings accounts, and they need 2.5% on top of that, then I see 11,2% interest rates already. The bank employees you see, don't work for free. So, we'll see some sacking in banks soon, coupled with higher interest rates.

There's the high oil price, the high food price. If RBA lowers the rates, the AUD dollar will plunge and export will be hurt, on top of that even more credit will disappear from Australia as investors flee to 'safe' Europe.

People are overleveraged to the max. They have 40-year mortgages ( that's about your WHOLE working life expectancy ) so it can't get any more. ( there's some silly 100-year mortgages in Japan, but that's just silly.
Most family income where there are 2 incomes own million-dollar houses and thus are also leveraged to the max. They are paying back almost everything they earn into their house. Now you see the problem. When the small companies go down because of negative equity and higher interest, these people have to foreclose their homes, next come the bigger companies, who will make losses because the economy is starting to go down.

Basically, just have a look at what happens in the UK and USA. I have no idea why Australia thinks they will be spared. Every problem the USA has , Australia has either double, or triple the problem size. The crash in Australia ( both housing / economical ) is going to be much worse than the USA for the simple reason that Australian houseprices are 6 to 10 times average wages, and in other countries are 3 to 4 times average wages.

There's a reason that houseprices are historically 3-4 times average wages. The reason is :
If you spend 40 years of your life repaying for your house, that means that 40 years long, you have been stealing your own future money from yourself, and thus can spend less. This has direct effect on the economy ( although noone has yet studied this ) it's quite easy to predict what will happen : Society have already spent the money of the next 40 upcoming years. The solution that USA came up with was easy : Just print more money all the time.

The problem, ofcourse, then gets worse. More money = more debt = needs more money = more debt = needs more money = … etc

We've come to the breaking point. More money is not an option anymore. ( where will the joke end… like Zimbabwe ? With 10.000.000.000.000.000 bills ? ). So you see, no more money = less debt = less credit available = no more buyers because debt has gone = more houses on the market = more stressed sellers = lower houseprices.

It's unavoidable.

You can imagine a locomotive with a spring attached to the wagons. In order for the wagons not to crash into the locomotive, the locomotive has to go ever faster. If it slows down, the whole train will crash.
That locomotive is now running at it's maximum speed. And the wagons are incoming with massive speed from behind. The only option is to go faster faster ( more money more money ). But we're at maximum speed. It just won't go faster.

Brace for the crash.

Yarpos : A while back ( I believe in this thread, could be another one also ) I warned people about ANZ. If any bank is overexposed to all the crap of USA and bad debt, it's ANZ. Be very very wary about them, and don't keep more than 20.000$ AUD on their bank accounts. A bank run on ANZ is imminent, we all know it, it's just a matter of time.

As for Australia : Australia is in for a bigger crash than USA has been in. This also is just a matter of time.
Like I have said many times before, the real troubles won't begin before september 2008. That is in 1 month from now. I'm not saying doom is coming, I'm just saying VERY bad times are coming for people that have debts or are otherwise leveraged ( 80% of the australians ). If you have savings, invest in gold or other non-devaluating assets. Stay clear of stocks and above all, stay clear of property.

September 2008 : That's when trouble starts for Australia.