The Hawaii Tribune Herald has this update. "A glut of houses for sale combined with rising interest rates have turned a once-booming market in East Hawaii into something else for sellers. The situation is most noticeable in places like Hawaiian Paradise Park, where numerous speculative houses line the red cinder roads, waiting for buyers. In a one-mile stretch on 15th Avenue, five 'For Sale' signs can be seen along their respective properties."

"After Susan Rosario put her family's two-house lot on the market 'a few months' ago, they've had with just two visits and no offers. 'I'll just wait,' she said. 'If you can find me a buyer, go right ahead.'"

"'There's a lot more supply and a lot less demand. Economics 101,' said real estate agent Henry Correa Jr. Asked whether he thought home prices have reached bottom, he said, 'I think it's early.'"

"'I was saying this was going to happen a year ago. I'm surprised it took so long,' he said. He cited one property, originally listed for as much as $900,000, that had to be discounted 14 percent to $770,000 before someone made an offer. (the final selling price was not disclosed)."

"(Broker) Nancy Cabral wrote a letter to her rental investment owners in April informing them of the market conditions. 'The State of Hawaii, the Big Island and more specifically East Hawaii have experienced unprecedented real estate growth over the past several years. At this time, two years ago Day-Lum Rentals had virtually no rental units available and rent increases were common. Since that time, thousands of new homes have been built in East Hawaii and the supply of homes for sale and for rent has increased substantially.'"

"The letter continues: 'Our sister company..feels this market adjustment will continue for the coming year or more, as more homes are added to the market.'"

"People are still moving to Hawaii, Cabral said, and supply remains tight around Hilo, toward Mountain View and the area north of Hilo, though it's not hard to find 'For Sale' signs there. 'Some of your bigger subdivisions will have a bigger surplus of inventory,' she said."

"'What we're seeing now is that the market is adjusting,' said Realtor Pat Halpern. 'The market is beginning to decline into a more reasonable situation, and hopefully it will allow more of the local people to buy,' she said. 'We're sitting with a lot of homes and fewer buyers,' Halpern said."

The Age reports from Australia. "Between 1997 and 2003, the price of a home in Australia's capital cities doubled. But a new mega tax break in the May budget means this probably will never happen again. Instead, house prices from here on are likely to at best flatten out, at worst fall somewhat."

"It will jeopardise the value of the $160 billion invested in rental Housing by the million or so landlords who are negatively geared. house prices in Australia are essentially driven by investor demand. The long surge in investor housing in Australia has been driven essentially by a cocktail of tax breaks. The negative gearing rules allow investors in effect to push part of their losses onto other taxpayers."

"Renting out housing has become Australia's most unsuccessful business, and by a long way. Two-thirds of landlords now tell the taxman they are losing money. A lot of today's housing investors could face years of operating losses without ending up with much in capital gains."

"Reserve Bank governor Ian Macfarlane told The Age last week that property prices in parts of outer Sydney had fallen by 20 to 30 per cent since 2003. 'A lot of small-time investors who came in in 2002 and 2003 are probably way under water,' he said."

"Negative gearing has a lot wrong with it as an investment strategy. For a start, it involves losing money. Even in 2003-04, preliminary tax figures show, 938,000 rental owners declared losses of $6.1 billion. Given rising interest rates and house prices since, by now they are probably losing $10 billion a year. That's a lot of money to throw away."