The US property market experienced its first annualised decrease in July 2006. Australia has just had its first in December 2008.

Recent economic data suggests that house prices in Australia are declining quicker that the US at the same point in time - we are just at the very beginning of the downward spiral.

Of course, don't expect the "experts" or "industry leaders" to admit this. Nor should you expect any unbiased media reports about Australia's housing crisis - the MSM have been a part of this pyramid scheme from the start (whatever would they do without all that lucrative real estate advertising?). In short, all the above parties have a vested interest in talking up the market.

In many places in Australia prices have almost trebled since 2000. Whereas houses were around 3 times average annual earnings, or less, the Australian average is now 6.6 times. (This compares with an average American value of 3.7 times – which commentators there have called possibly their biggest housing bubble in history.)

The bigger the boom, the bigger the bust.

Some speculators are no doubt hoping that high immigration will keep the market afloat. High immigration has certainly been a factor behind Australia's hyperactive property market, with speculators lobbying for the continous importation of cashed-up buyers to keep demand running red hot even after locals have been priced out of the market. But this situation clearly cannot continue. The Rudd Government will find itself with no choice but to cut back on immigration as the economy falls into recession and unemployment rises.

So, forget the nonsense about Australia being somehow immune from the housing market crashes currently being experienced in the United States and Western Europe. We are in for a messy market correction.

Dont discount the effect of severely restricting the rights of landowners to develop their land. The control and frequent abuse of these rights probably has more to do with the high immigration rate than anything else. It is possible to build a dwelling that meets health an safety standards for as little as $25 K. If landowners were able to subdivide their properties and build such dwellings, the housing crisis would quickly end. But the pollies and their friends are making far too much to let this happen.

It is about 30% overvalued.I bought my present house back in 1988 for $176,000.The house across the road just sold for $950,000.In the long term,it still have more stability than shares.

Here is what will happen to Australia.

Thanks to the bursting of the US housing bubble, Japan and China have slowed down dramatically. Such a slowdown in the Asian giants means less demand for Australian exports. This was result in job cuts. Now here is how the SHOCK will be MAGNIFIED in Australia - if people start losing their jobs, the HUGE debt on their homes cannot be repaid. Such “defaults” means asset values will plummet; banks tighten lending, foreclosures and defaults skyrocket - thus, overinvestment in land, is exposed by external forces. Exogenous factors can be transmited throughout the economy due to endogenous weaknesses (i.e. land speculation and the debt which comes along with that). I think we are headed for a big downturn, contrary to what the RBA says (its growth predictions haven't been too crash hot so far). Just wait until defaults on homes start popping up.

And then there is the massive debt blowout of the States. All the extra people have incurred a huge infrastructure cost. It is only those profiting (e.g. developers bulldozing the bush and constructing shoddy housing) and their political friends that keep the wheel turning. Give the public back the right to develop their land, and all of a sudden housing costs plummet and the corrupt incentive for high immigration disappears.

We have to reduce the size of Govt.37% of a house land/package is made up of govt taxes and charges.In NSW there is no money to be made in building or renovating houses.

Just recently I heard of a person who is making a fortune by charging $100 for a bed.4 to a room and he owns a couple of blocks of units.$800 a week for a two bedroom unit.Here we have a labor socialists govt screwing those who vote for them.

There's ALWAYS been property "market corrections" in Australia, and there always will be.

A downward correction will destroy some people (people who bought in the boom), and provide magnificent opportunity for other people. An upward correction will destroy some people (housing prices ridiculously out of reach), and provide magnificent opportunity for other people.

This is the way capitalism works, and has always worked.