First off, I'm not a speculator or what one may even call an investor. I own a condo, that I live in, and bought another one, that I also plan to live in when it's complete.
Secondly, there are marked differences between the overall market in 1989-90 and 2008. Interest rates were at 11%, ours are at 4.25% and lowering, inflation was at 8%, ours is at 2%, unemployment was 10%, our is 5.5% - these numbers in 1989 had been around a while and weren't just a result of the recession.
Another reason the condo market went bust - on top of the above financial reasons was that the developers were building condos without presales. They would sell 10% of the units, get the money from the bank, build, and then they had to dump the 90% on the market - when the market could least handle it. Supply was far more than demand, hence the prices dropped. While I'm not saying there won't be a correction (my guess is sometime in 2010), the condo market has evolved from an undesirable alternative to owning a home, to a way of life that is actually desired by many. Until this past year (which is why I think 2010 will be a year of potential reckoning), most new condos were sold to people who actually live in them. Watching the listing:sales ratios and the condo rental vacancy rate will give us the most accurate forcasting of what might happen and right now the vacancy rate is less than 1% in new condos, and the ratio is 1.9:1 (a healthy balanced ratio is 4:1, so it's still very much a sellers market).
It's also important to look at the numbers in the US before the recent runup and collapse. Even with prices dropping some 40% (and I have no idea where you get this number from unless you're including the depreciation of the US dollar into your equation), these homes are still worth more than they were 5 years ago. If you had just gotten into the market, then yes, you're kinda screwed, but just as with the last US home correction - once it had run it's course (which took about 2 years), it only took another 3 years for the homes to get back to their highest valuations. So, like any good investment, it pays to sit and wait out the market. I agree that speculators aren't good for anyone.