Unlike stocks or commodity, property is relatively illiquid, price doesn't tumble over weeks but decline over prolonged period of time.

Historically, current low interest regime is a desperate measure. If U.S. economy is on track to recovery, healthy or idea Fed rate is between 3 to 5%, means interest rate will rise by 3 to 5% eventually.

From a bank account classified as npl to auction off property charged normally take 2 to 3 years. Private investors are reluctant or unlikely to sell their investments at a loss. However, if enough number of properties are auctioned in a short period of time, transacted price is very likely will register well under market price.

Property market is largely supported by availability of bank loan. Loan amount is subject to valuation, valuation is subject to recent transacted price of similar property in the neighbourhood. If valuation is depressed, volume of bank loan will drop and sending more sellers to npl.

Many of recently launched developments with dibs expected vp is in 3 to 4 years time. Believe many flippers bought multiple units, with intention to sell the moment taken vp and don't have means to hold. By the time these properties are vp, interest rate is almost certain have increased by over 3%. Pressure for them to sell immediately could be unbearable and many will be classified npl.

If kv property market meet the perfect storm, property price will be depressed for 5 to 8 years. No one can predict when is the peak until the peak is over. However, one can claim current price is unsustainable.

measure to cool down npls is to tighten the borrowing by making it harder for anyone to borrow from the bank. This include further tightening the LTV for property purchases. eg. 80% loan for 2nd prop, 70% from 3rd prop, 60% for 4th prop and so on.

Another way to reduce borrowings is to increase the rate. we may see increase of rates in the year 2014 by 0.3 - 0.5 or maybe even higher. as a result, rate of nps will increase.

i dont think central bank will reduce the rates any further as this will cause further increase in borrowing. additionally credit rating company will downgrade our banks' outlook

edited. thank you @jolokia