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Problem with that quote is that the 80K figure is AFTER the rental deductions. So someone on 105K with 26K of property investment deductions is "earning less than 80K".

No I'm not confusing anything. Overseas property bubbles were caused by easy credit and popped when that credit was withdrawn. Australian market has also mostly been driven by easy and cheap credit (and favorable tax policies). It doesn't need a wholesale selloff. Sales volumes drop severely...

I was referring to what happens when credit freezes, not the current reality in Australia. No I am explaining what happened overseas in many markets when credit dried up. They had never experienced it before and sales dry up also as sellers don't want to accept falling prices, but they...

Sellers hold out for a while in when prices are decreasing, they don't want to accept the new reality. The beginning of a crash involves very low sales volume. But people need and want to sell and after 1-2 years lower offers are accepted and the thing snowballs downward when expectations are...

Shortage of buyers = dropping prices. Interest rates don't matter so much when the loans are not available. If credit dries up as it did in some countries (90% drop in loans made) prices crash, they don't just soften. Its the finance that's holding the whole thing up, low interest rates just...

You are missing the big factor that crashed overseas property markets in the GFC, sharp reduction in the availability of credit. Australian property prices would not survive this.