I live in a city (Australia) where I think apartment prices are going to fall. I think they've already fallen a little bit but there are so many more units coming online in the next year or so. Already the rental prices are falling over the board.
I've just bought a house though. We felt when we were buying there was a bit of demand - house prices have stayed level and any reasonably priced house would be sold within a month or so.
My question is if apartment prices do plummet, what generally happens to house prices in the same area?
On the one hand, a place to live is a place to live so more places to live should mean that existing places to live should be cheaper.
On the other hand, the people that live and buy apartments are slightly different to those that live in and buy houses.
Apartments are commonly bought for investment purposes and rented out to people who just want somewhere convenient to live temporarily. Houses are generally bought by people that want to live in it and for the desire of living in their own home.
For the most part, it's almost like they're two seperate markets. So should I be worried? What are the correlation between apartment and house prices?