property will it follow the asx, page-35

Nickoo,
The old rule of thumb with the bank lenders used to be 25% of after tax income determined the borrowing power.

So on that basis above your couple could only afford a 170000 or less house.
Rough calculation 170000 @ 6% interest = 10200 pa plus capital repayments over 25 years. So it would be less borrowing capacity.

Net income of 40000 means 10000 pa available for home loan.
It is the 2 income earners, both bringing in 50000 plus each gross that can afford a 400000 house.
Lot more people now each earn above 100000pa, they can afford to buy.
I have not checked the ratio the banks use today, but I guess it would be similar.
The banks would not lend if the repayments took out 50% of net income. No lender would.
You can test it on the internet, westpac has calculations you can do to test borrowing power and repayments.,
People who have held a house over a long period of time, and children and costs out of the way, house price increased, likely to scale down, sell up in suburbs and pay the higher prices in closer to city.
People tell me 30 years ago they bought their inner Melb properties for say 12000, same props now worth above 600000.
Maybe ask the forum here for examples, ask your neighbours, what they paid and what it is worth now.
Good luck
My answer is very general, do your own research, loads of answers available on the net, you just have to look.