"the bulls put forward reasons for this magic, but when comparisons are made with other countries like Japan, they all seem rather illogical"
Well a few months ago I made the comparison (as best you can given the differences) by comparing the lowest priced property I could find in Japan against a bottom end unit here in Adelaide and the pricing was on par. I know I wouldn't want to live in that small room that was considered an apartment in Japan. So based on the Japanese example we probably don't have that far to fall if you compare similar segments of the market - though in reality it is very hard to compare markets like this given cultural differences.
As for your point about money we all know that if the credit market freezes the central banks will just crank up the printing presses whether you or I like it - that is the reality of life we currently live in. And despite what the bears say here relative to the rest of the world and despite our incompetent government we are still far better off than most places in the world.
