Just looking at how supply and demand are moving to see if it may be sustainable. For example, we know that, at some point, supply is going to increase for different reasons (ex. people interested to sell after price rebound or some people forced to sell because of mortgage pressure). So the question is how demand will respond to a higher level of supply. We are already experimenting this situation in Sydney and, so far, demand has been there (cf high level of auction clearance).
There are other elements which may explain why prices are still so resilient : - a recent Corelogic study showed that there has been a rather high volume of people who bought during the last 2 years who have decided to sell at a loss (that's interesting as they are probably the mortgage holders who were probably the most at risk to default), - quite interesting also to note that mortgage holders have been much more resistant than expected; RBA used to say that 15 % of mortgage holders would become cash flow negative when rates would reach 3.6 %, but since then, RBA has changed their view saying that people were more resistant thanks to refinancing, taking a second job...
Other element we can consider : this trend of home price rebound is not specific to Australia. cf recent article in The Economist where they were saying that the price decrease may be over in most countries. We know that, two other reasons for this rebound (not just in Australia) are : - the high level of cash buyers (both in Australia and the US), so people not impacted by interest rates, - but also the impact of high interest rates on construction (clear brake on new constructions).
Overall, the obvious scenario where the home prices would again decrease in Australia : large increase of unemployment, together with interest rates which would remain high. Other elements to watch : level of mortgage arrears (still low for large banks so far) and regulation (in particular towards investors who are more and more keen to sell, while they represent around 1/3 of the home market).
