In 2004 I returned to Perth, Australia, after a year of traveling overseas. I returned to a city with a ridiculously strong economy. Demand from China had driven commodity prices to record highs, and the mining industry was booming. For those unfamiliar with the geography of Australia, Perth is the capital of Western Australia, which is approximately one third of the land mass of Australia (ie it has A LOT of land for mining). In recent years, people have been flowing into Western Australia (in particular Perth) from across the country and, as a result, housing prices have soared. In fact, in November 2006 Perth overtook Sydney as the most expensive city in Australia with a median house price of $564,000 (I believe this has since reversed). Three years earlier, Perth house prices were less than half of those in Sydney.

During this period, there seemed to be endless news stories about the booming economy and soaring housing prices. Also, the banking job I had at the time meant I was dealing with housing appraisals every day. It was obvious that many people were becoming wealthy, but since I did not own any property and had little invested in the share market I was not one of these people. And for this reason, each housing appraisal or story of the booming economy was like a nail being driven further and further into my skin.