If a component to inflation are wage increases then the ability to pay is also increased. And then property is more attractive as a hedge against infaltion and so on...in Keating recession prices dropped in parts of Sydney due to rising unemployment esp expensive property, Mosman etc as middle managment was made redundant. The rest of the market went to sleep.
One factor coming in to play in Sydney is the lack of land, the traditional 'land bank' that developers maintained has been rundown. Current developments have been in the pipeline for decades without new areas to replace. Might have to tear down Mt Druitt and start again.
