It has been a bad week for property. It's now confirmed what's been widely forecast: prices are falling. And the doomsayers are predicting we will follow the United States and United Kingdom into a broad-based and prolonged housing slump.

Here's why I don't think that's true.

For starters, the figures responsible for all the gloom and doom headlines - the official ones from the Australian Bureau of Statistics - were not actually that bad. While a survey of analysts by Bloomberg had forecast a 1.3 per cent national drop for the quarter, the dip came in at only 0.3 per cent. This meant the market shed just a skerrick of the 1.1 per cent it gained in the first three months of the year.

What's more, for the year prices rose 8.2 per cent - almost exactly the long-term average annual property growth and a far cry from the 10 per cent-plus plunge some pundits have been bandying about.

On a capital-by-capital level, Perth fared the worst, dropping 2.4 per cent over the quarter and 0.9 per cent over the year.

All other cities to experience three-month falls - Hobart with 2 per cent, Canberra with 1.4 per cent and Melbourne with 0.3 per cent - actually recorded positive annual figures (3 per cent, 7.2 per cent and 14.1 per cent, respectively).

Elsewhere on the eastern seaboard the news was much better with Brisbane continuing to chalk up gains - 0.6 per cent to take the annual growth rate to 14 per cent - and even Sydney putting on 0.3 per cent, bringing the yearly figure to 4.4 per cent.

Protecting us from significantly nastier future figures, first of all, is record population growth - underpinned by migration - at the very time there is a housing shortage. We have net immigration of about 190,000 people a year but each year are building just over 100,000 new dwellings.

Quite simply, these people will need somewhere to live, which will create a natural floor under prices.

Then there's the exodus of investors from the property market, thanks to 12 successive rate rises since 2002. The shortage of rental properties has pushed vacancy rates down and rents up to record levels.

As a result, the rental yields on investment properties are the best they have been for decades and the sharp drop in mortgage lending stats out last week implies this will be the case for a while to come.

Finally, all those rate rises mean the RBA has room to move to stimulate the economy and property market. Very few countries are in this cosy position, having already been forced to slash rates to ward off the credit-crunch-induced economic slowdown. (Cheers to our resources boom for this one.)

Almost half of the economists recently surveyed for The Australian Financial Review's quarterly economic snapshot expect that within six months the official cash rate will be up to 0.5 of a percentage point lower than it is today.

In the meantime, the high rates are forcing some people who have overextended themselves into fire sales, which coupled with negative property sentiment, mean there are great bargains available. Desperate sellers and a dearth of buyers equal low prices.

All in all, it could be the time to move back into property. With rents and yields showing no sign of easing in the short term, and interest rates expected to come back, your servicing costs could be lower than you think. And once the rate cuts begin, you could find yourself sitting on some tidy capital gains, too.