"* At the end of the day, house prices must be at levels...

"* At the end of the day, house prices must be at levels affordable to purchasers, particularly those on middle incomes. Average house prices cannot keep rising if affordability is beyond a significant proportion of owner-occupier buyers.

* It's extremely unlikely that average house prices here, which for good reasons held up well during the global financial crisis, will drop sharply as the global upswing takes hold. A more likely way in which the affordability problem will be addressed is for average house prices to remain fairly flat over an extended period, as they did during much of the 1990s.

* Even then, the high price of housing is likely to lock many households into working longer hours than they otherwise would.

* One-third of Australian households have a mortgage. Among these, households that borrow heavily for housing will be vulnerable to the effects of the higher interest rates expected over the next several years.

* If I'm correct in suggesting that average house prices over the next half-dozen or so years will be broadly flat, as they were in the 90s, investors in rental housing will need to look to a higher level of rents to attract them into the market. Even then, investment housing could under-perform the other leading asset classes for sometime."

http://www.theaustralian.news.com.au/business/story/0,28124,26218302-5001942,00.html