Have you by chance looked at most of the indicators which now clearly point and confirm that Australian property prices are over-valued? More importantly Australian's are already over extended and this largely precludes any further growth in the residential property sector.
If you haven't had the opportunity to read the article posted by bassyabbie earlier - 'In search of a prick', I'm almost certain your view afterwards will be different.
In terms of your point regarding unemployment I don't believe we actually need unemployment to go significantly higher, even a flatening of job growth will have a negative impact and I'm expecting exactly that - flat job growth. Why, we've got a two-speed economy in Australia and the resources boom only benefits a limited number of Australians. We're still a predominantly service-based economy (around 70% of GDP I think) and this sector of the economy appears to be in real trouble.
I see the biggest speed hump to house prices cotninuing to increase as being interest rates. Look at the damage the small rise in real interest rates we've seen already has done, when rates really start ratcheting up, the unwinding of the bubble will be well and trully under way.
