Not assuming anything.. You can only sell houses in australia at...

Not assuming anything..

You can only sell houses in australia at a price that the wages in Australia can afford. That is a fact you cant escape which limits the upper end of house prices.

An increase in interest rates back to normal levels would also push hosue prices down regardless of demand, as your buyers borrowing power will be limited compared to the previous years, which means the offers will be less.

The problem with your logic is you ignore the fact that most people have to pay a mortgage and think people can spend millions on a house even if they only earn thousands.