FIRSTLY, Valuers in Australia are not easily influenced to over price a property. If something goes wrong with a loan, the VERY first person in the firing line is the Valuer. If it can be proved that they overvalued a property, then they will be sued and sued hard. The mortgage insurers want to recover any lost monies, so the Valuer is an easy target (their PI insurance is astronomical).

SECONDLY, let's define a sub prime lender. This is not as easy as it seems, but I would generally classify an Australian sub prime customer as:
1. Someone who doesn't have payslips or tax figures to substantiate their income (although Australian Banks are now VERY active in this market ... most of my loans to these sort of people are through the banks).
2. People with Credit issues (Defaults, Judgements etc ... although, once again, the Banks are tinkling on the fringes).
So, the distinction is becoming very blurred as the Banks start diving into the pot in the chase for profits.

A 100% Home Loan is very definately a PRIME loan these days ... Banks are falling over themselves to do these types of loans (one major has just introduced a 100% loan WITHOUT mortgage insurance). Also, 100% customers need to be pretty solid (employment history, earnings etc) before they'll even get a look in.

Having said this, as a personal rule I would not be more than 60% leveraged against Real Estate ... any more than that and you just may not be abe to weather the storm if doo doo hits fan.

Many have been subjected to Classic Conditioning to be cooperative, or even trained to be so, to hit numbers to make the loans work.

In any given City or County, there is probably less than 5% of the appraisers who are truely neutral, objective and unbiased; although all licensed appraisers certify that they are.

Most residential appraisal assignments start with a predetermined value promise in recent years. Pushed values 5% to 10% per year, have lead to a 25% to 50% over valued market over the last five years.

How far will priced go down from the peak, about 25% to 50%. Some areas have already gone down more than 12% since the peak in 2006 and are continuing down, incuding my own Zip Code.

Anyone who refinanced or pruchased with an 80% or larger loan or a negative amortized loan in the last four years, is subject to having negative equity before it is over. It will be over in about four years.