Let's see behaviour of market stock in Australia over the past 5 years or so:
|Chart1 Stock on the market RPdata|
|Chart2 - Stock on the market SQM|
|Char3 - US existing home inventory|
From the chart we can see that home inventories in USA at the peak were lower than current inventory in Australia. At the peak inventories were only about 4% of total housing stock, while that percentage already passes 4.5% in Australia. It is hard to say that 4% of the total stock is extreme number that caused 33% price crash in USA. We should also notice that stock on the market fell in late 2008 early 2009 when house prices dropped the most. This means there is something else that significantly affects house prices.
Lets take a look at sales:
|Chart4 - US home sales|
Let's see whether this holds in Australia
|Chart 5 - Australia home sales|
It looks like inventory levels at the moment are more than enough to enable market crash, it's up to buyers to set market direction. Recent drop in sales (since 2010) is larger than drop recorded in USA during the first two years of price contraction. If soon buyers do not return to the market in large numbers, we may expect price fall to accelerate. There is no need for mass panic sale for prices to fall significantly.