There’s the upside of property values falling;
1) Cheaper to move up the ladder.
2) Smaller mortgages mean less of a financial impact on living standards and a more manageable debt.
3) Auctions have some great bargains with less competition until the market turns.
4) You’ll pay less stamp duty
5) People who had no chance of buying will find they suddenly have the opportunity.
6) If maximum LTV’s are reduced and lending is prudent, price inflation won’t run out of control.
The market has been overcooking for way too long and this readjustment will bring prices back inline with the natural equilibrium the market would have found if there hadn’t been this irresponsible phase of lending way too much to people – many of which who were not really credit worthy.
It’s tough on those who bought at the top of the market, especially those who are first time buyers with little equity.
There will eventually be a recovery, probably nothing like the last decade, but i reckon more like a steady consolidation. The greedy developers, lenders and estate agents won’t be able to pump the prices up so easily next time.
I wish everybody the best of luck until we come out of this mess.