Interesting analysis Graham, and it is good to see some affordability returning to the housing market, along with "positive" returns?
However, I believe that the real problem for Abbott and the recent rise in the polls for Gillard, has a gender bias, compounded by the austerity programs of Newman, O'Farrell And Bailue?
The negative campaign has run its entire course and needs to be rolled up and put away, before it further damages the coalition!
Abbott's cause, would be better represented, by the release of some fully costed policies, that also demonstrate he is "different" from his state counterparts!
The reduction in housing prices, simply a long overdue if unfinished market correction?
Cheers, Rhrosty.

'Abbott's cause, would be better represented, by the release of some fully costed policies'

Yawn, the old game of oppositions and fully costed policies. Why would any opposition release it's policy ideas for an incumbent government to steal or diffuse using their superior access to the books and public resources. No opposition does. Rudd definitely didn't in 07. It's a childish argument.

http://www.theage.com.au/opinion/politics/as-the-coalition-knows-there-is-a-long-history-of-costing-opposition-policies-20121107-28xbo.html

The flip side is when the ex-opposition takes power and sings the story of all the black holes in the finances it had no idea about when formulating it's policies.

Standing in front of sign arguments and taunts about no policies makes the Labor fan boys look so stupid.

I would say that now is about the worst time one could consider investing in property.

The global economy is in a deflationary spiral that is not going to be resolved any time soon.

The so-called bank stress test undertaken by APRA last week was a complete farce.

House prices may rally a little here and there, but in broad terms, expect prices to continue to fall overall. I would suggest that in time house prices will return to those of the late 1970's in the next 5 to 10 years.

The globalised economy is dying a slow death.

Inflation is not going to be our problem, deflation is.

The price of gold is soon to continue its climb, central bank money printing (faux money) is the only bullet left in the gun in the US and Europe, at least we can drop our interest rates as things get progressively worse.

The ride forward is going to get bumpy, the last thing I would do is buy a house, either to live in or for investment purposes.

Suggesting people should consider buying property is like putting a ball and chain around their future, the days of turning your house or investment property into an ATM are long gone!

While I can agree Geoff that prices will continue down for some time, I don't think it will be very far. So manny have stuff all equity in their homes now, & rents are so high compared to repayments, they are better off paying the repayments, than getting out.

In our district, with 880 homes, 250 have been on the market for well over 12 months, but there is no reduction in prices. The more recent buyers just can't afford to sell for much less than they are currently asking. This is of course a good reason not to buy right now, to avoid being in the same situation.

I can't see them going any where near the 70s prices. My youngest, an office girl, in a medium branch of a national company, is now earning more than I was in the 70s, as a divisional manager of a larger national company.
Provided they keep their jobs, todays home buyers do have the capacity to service their home loans, provided they don't have too much more on the never never.

I also agree with Geoff of Perth.The banks are willing to loan my daughter and her boyfriend $ 1.1 million with just a $50,000 deposit and combined gross income of $ 160,000.This is insane and they are setting us up for a US style housing collapse.

With the mining industry waning,the only way to create new money for growth is debt and that makes us slaves even more to the international banksters.We can create our own credit via our own Reserve Bank of Australia but our pollies are held captive to this international thieving finance system.

The US Federal Reserve has gone into overdrive with QE3 and create money with no limits just like Europe.They are debasing our currencies via inflation and expressing it as debt.

My prediction is next year we will see a collapse far bigger than 2008.It has been estimated that our houses here are 40% over valued.Adding another 10% to 20% will cause an even bigger disaster.

We need investment in production of food and goods,since our Govt has gone feral and has not a clue how to address real problems and needs of ordinary Australians.Everything our Govts do,oppresses the individual in their quest to be independant,free and productive.