Floor to any property price drops?

[wally]

In sydney for example, does everyone agree that we don't have an oversupply of housing?

Now say that you believe that property prices are set to fall dramatically....
but in a situation where we dont have an oversupply isnt the most that prices can fall governed by what it costs to build a new property?

 

[Rockstar]

Well it's hard to imagine that wages and building materials are going to fall so the only giving point is the basic land value. This can definitely fall in certain areas that aren't experiencing an undersupply. Research is crucial in these times of uncertainty.

 

[depreciator]

I don't think it's as complicated as that - but I'm a simple soul.
Prices of existing houses in some areas may not fall.
In other areas they will fall.
How far?
Well, they'll fall until they get to a point where people can't resist the temptation to buy.
There are lots of people out there who just want to buy a home - some of them would have been in high school when the Sydney bubble started to deflate.
Rising rents, falling interest rates and falling prices will have them keen right now. As soon as a particular property they like becomes affordable, they will buy it.
Investors will also buy when it stacks up. They won't necessarily be looking for a particular property - just one that makes sense.
That's why I don't pay much attention to these predictions of every house falling 40% or whatever.
Affordability (and desire) will kick in way before then in some areas.
Scott