"The sectors where we have seen biggest falls have been based generally around discretionary/lifestyle properties. Certainly the upper price level homes and units fall into these categories. Instead of people selling their principal place of residence, they are selling the holiday house and subsequently we have seen a significant softening in the values. In some cases, these values have fallen well below replacement cost.
There is an interesting change in the gap between lower priced property and upper priced properties. For example, a property that was worth approximately $350,000 in say 2005, is now worth in the vicinity of $400,000. Whereas a property that was previously worth $1,300,000 in the same period is now worth $1,000,000. This gap has shrunk significantly, which would lead us to believe that something has to give. Whether that is the lower priced properties are to fall in values, or the upper price properties are to increase in values, is anyone’s guess."