Some interesting replys here...
Interesting that a few of you seem to think so many people are living on the edge, living purely on credit-been hearing this story for a while. Yet these seem people seem to be able to get even more credit in order to fuel the property boom of late...something doesnt add up?
Anyway, if you hold this view then you must be confident the pending rate increases will tip them over the edge? So Im presuming you have put your money where your mouth is and have sold all your properties??
That's because they're living on the edge after they take on more credit (at low interest rates) to fuel the property. And the other half fueling the market are probably speculators with cash.
Finally I'm a believer in time in the market, but that doesn't mean you go out chasing extremely pricey properties when the risk in the market is peaking. Besides I positive gear enormously and will do so even at very high interest rates, so no need to sell considering all the transaction costs, the difficulty of sourcing more highly yielding properties etc. I know a lot of people get upset when people tell them the market is getting riskier.