We all have our own opinions as to when prices will “return to normal”. My attitude is somewhat more negative as, what got us into the financial state that economies around the world find themselves in, was banking institutions lending money to people who could not in reality afford those loans. The more they lent, the more prices inflated and now that they have stopped lending those prices have deflated.

I don’t think that prices will return to where they were, until banks start lending money recklessly again, and I don’t foresee banks lending money recklessly for at least 10 to 20 years. In other words, I would take a view that the property prices of say 4 years ago were inflated, not real, and I would not be comparing the current market to them and waiting for a “return to normal”. On the other hand, our property market never did reach the heights of the overseas market, and the National Credit Act had started cooling our property market before the economy slumped.