The residential property market in Australia is easily the most favored asset class by Australian Investors. Residential property is a tangible asset that people can see and experience. Most Australian property investors experience from the past 10 years has given the investor the inner belief that by holding the asset they will reap incredible rewards well into the future. They believe they understand the asset class and will benefit similarly into the future by holding the asset. Most of the last 10 years have been an extraordinary time for property investors with property returning well into the double digits.  Rents have also risen at astonishing rates making negatively geared properties cash flow positive after only a few short years. What were the main factors driving property prices so high and in my view highly overvalued by historical standards? [Read more…]