Dan42,
             Lots of things contribute to an every increasing push on house prices.
As IP Freely mentions above.
But also, inflation gradually increases the prices and cost run up over time
bigger and bigger houses and extensions all increase average prices cost of land development with government costs.
wages slowly increasing mean more money available

rates have dropped to what 30 year lows at the moment, thus more money can be loaned for same wages
more and more people are buying as tenants in common so they can afford more expensive houses.

Basically, everything is in favour at the moment of large house price increases, BUT, house prices are basically flat and negetive over the last 4 years taking inflation into account.

So what is going to happen over the next year or so with unemployment starting to bite, probablility of rate increases, nil or very little wage increases, debt biting into most peoples incomes, etc. Government going broke thus will need to increase rates on everything, power costs surging, water prices surging, council rates surging, food prices surging, etc

Thus I would expect some small price rises now and then , but prices to fall over the next year or two.

Andykirby,

                AHH, there maybe some truth in what Terry says, but, most people they surveyed probably did not think very hard about where their deposit was coming from.!  If they now loose $7000 from their deposit then that will have a very large effect on their capacity to borrow, thus they will have less money to buy, thus low value houses will eventually reduce in value to where the prices are affordable to First Home Owners.

I see problems coming, unemployment to reach 10%, its going to be a terrible few years.
House prices will fall, unfortunately its a reality.

Internation wrote:

Last year we saw properties rise at 11% even in tought circumstances, unit/apartments rose 17%. Some suburbs grew a lot more than this.

What a load of crap.

Paint – yes.

Also if you can instal yourself ( electrician ). Put in some fans to all roooms – they are cheap and great for summer and winter ( put them in reverse at the switch ). Also put in exhaust fans to bathrooms and kitchen – will preserve bathroom and get rid of fumes.

geoff80,
              First of all – why are you paying land tax? What state are you in?

You are correct in your thoughts – sell your I/P if you are loosing money. You can pay off some or all of your PPOR.
In the past you only needed to buy property and watch it grow, but times have changed and it is not likely to be the same for at least 10 – 20 years.
Do yourself a favour and sell before it looses more money and you sell when everyone else is selling and loose tens of thousands.

If its an old place, maybe it has lino ? sometimes people put the newspapers under it, and sometimes they put new lino over the old. Its exciting reading the old papers from the 1960's etc.

Just a stab in the dark.

shanematt,
                    I congradulate you on doing a good job so far with your properties and asking for peoples inputs.
I personally still think you are relying on property growth for the next 10 years or more to be as in the past, which I don't think is going to happen, but even if it is much less then you will still do OK as far as your plan goes. But I think further down the track you may wish that you kept working a few more years and accumulated some more assets just to make sure of a good income for your last 30 years or so ( I don't know your age but guessing maybe 40 y ?? ).
                   Best of luck if you do your plan, maybe let us know how it is going every now and then. Assume you also have some superannuation as a backup?

shanematt,
                    You have been reading too many old books – forget the property doubles every 7 -10 years rubbish, that is history not the future.

                   O yes and I have enough rentals to live off, but still work, could also live off equity – but why go backwards??

Gordon B Gekko,
                              Love your posting, you have put a lot of thought into it.
ps I have just seen it for the first time.
                              As you have already said – the answer is too variable. So many things change over time, you can prove anything by using past figures for different locations and times. How long is a bit of string ??

       tsarbla makes a good point – the negative gearing has in the past been the best for overall gain, but you eventually come to a brick wall with regards to lending, thus some positive geared property can boost your lending potential and make you feel a little safer at night.

       If there was a yes or no , right or wrong answer to your question then everyone would use it. But anyway congradulations on your post, hopefully you will get some more input by people on the forum.