Property is now at its most unaffordable ever compared to wages. That means that it is worse now that when interest rates were at 18% (one of the worst times ever) - which wasn't for very long. So given that back when interest rates were at 18% they still came down and quickly - you where left with a decent mortgage that was easily payable. Now if interest rates came down you would still be left with a huge mortage (if you bought now). I think I would rather have interest rates higher than having a mortage that is high knowing which one can come down.
Here's an interesting article: http://www.businessspectator.com.au/bs.nsf/Article/The-seafood-disease-B7S7R?OpenDocument
I think the last sentence says it all - it will sort itself out eventually. I think that means that the average wage should be able to afford the average house.
