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Sure, yield has a role to play but no more than other factors such as supply and demand, capacity to service, interest rates, taxation and government policies, overseas money, etc... As for the 7%, markets around Australia have lived very happily with various yield levels for a long time with...

The rationale behind your bean counter friend is simply this: - "normal" yield should be 7%, therefore "normal" price should be 14 times the rent (1/14=0.07) - average yield in Australia is 4% currently, therefore to bring it up to 7% prices need to be divided by 1.8 (4 x 1.8 = 7). Thus...

Indeed percentages can be very confusing. - When people talk about a 20% drop in price it means that the new price is 20% lower than the old one e.g a 1000K property drops to 800K (1000 x 0.8 = 800). Similarly a 20% rise means 1000 x 1.2 = 1200. - But when people talk about a property being...