All those scenarios are isolated instances.
When the inner city apartments were tanking in Melb, this was due to a number of factors; very high LVR's by purchasers, bought off the plan (which is a gamble on the future), paid too much to begin with (what idiot pay $650k for a 2 bed apartment in a complex of several dozen?), lots of similar developments at the same time which caused an over-supply, so they were difficult to both rent and/or sell, so both rents and re-sale prices dropped.
The combination of all the above forced many to sell at huge losses.
Meawhile, my 4 Melb properties were plodding along nicely, going up, and mostly fully tenanted.
The $5 mill houses that sold for $2mill or $3mill often happens in an economic slump. People on high incomes are not necessarily smart with money. Often times, they spend it all on stuff, and have high borrowings to fit their income. They go mad and buy the big mansion; get hocked up real good, and at that end of the price ranges, there are not as many buyers if their finances go south.
LPT's are a stock market product. It is a packaged investment, and therefore out of the investor's control and governed by the fluctuations of the stock market, which has sudden and large corrections.
The average, run-of-the-mill residential houses and units in popular areas, which is probably 90% of the market, never have this sort of fluctuation.
