The Effects of Speculation on the Downside of House Prices

Aussie housing expectations have been heavily distorted by a very, very unusual period in history. The drop we're having in Aussie house prices is massive and unprecedented. And I think what will happen as a result of this current shock, and I would describe it as a shock, not a crash, you're having a massive recalibration of expectations that will be permanent. But there are strong, statistically serial dependencies or persistence in house price changes which means the asset class is quite statistically predictable.