As long as all margins are above 20 %, and the housing stock is "only" 20 % overvalued

20% was a year ago, unfortunately I have no more recent numbers. There has been ads about getting your house value now etc (Increase mortgage, go on a trip!). How many households that are on the margin is hard to know, my suspicion is more then a downturn will cause problems with amortisations. And with the systematic insolvency in the banking sector a small slump might reveal more holes then there should be.

JakeS:

the sovereign's macroeconomic stabilisation policies are sufficiently inadequate to push the country into a business recession

Hm, we do have pro-cyclical pensions and a surplus goal in public finances, though the latter is (or at least should be) measured over a business cycle, not a year. The automatic stabilisers has been weakened - only 35% of unemployed currently collects unemployment benefits - but from a high level.

JakeS:

Would suck to have been a first time buyer over the last couple of years, though.

That is what I have been telling friends for at least a year now, not that they listen. Call me Cassandra.

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