House price rises and falls are the manifestation of...

House price rises and falls are the manifestation of credit/liquidity availability.

When credit is freely available, unwise lending and relaxed underwriting prevails. Banks are prepared to lend more to people with less.

When the credit and liquidity cycle turns (as is now happening - even in Australia), the opposite happens and house prices decline.

The first sign of tightening is rising interest rates (which we now have). The next sign is tightening underwriting standards (which we will start to see in a big way during the next few months, IMO), meaning less people qualify for loans and those who do can only get smaller amounts. As sure as night follows day, house prices will fall in the face of this tightening.

There is no way known that a pissant little country like Australia can avoid the fate of the USA, UK and Europe. "De-coupling" will be shown to be a load of crap this year.