My position has always been that over the longer term, the most rational proxy for house price growth is simply the growth in household incomes.
Of course, the path going forward won't be smooth - there will always be peaks and troughs, and a correction might always happen - but the market has a funny way of making monkeys of those who try to be too clever by second-guessing it or sermonising about 'inevitable' negative outcomes.
Markets are far less predictable than people seem to believe (they've seemingly learned nothing and they still talk in absolutes despite having been wrong over and over again: "this will happen; that will eventuate...).
The result has caused anger among would-be homebuyers who have stayed out of the market for half a decade on the promise of a major correction.
Residents of cities such as Adelaide were merely sold something of a dummy, with prices broadly having gone nowhere, so all that has been lost has been five years or so of rent money. In cities such as Sydney, Melbourne and Perth, though, it was a full-on hospital pass, with prices moving up very strongly and renters being clobbered.
In direct contradiction to the predictions of an inevitable housing bust, I've unerringly forecast that the lagging supply in Sydney's inner ring suburbs will most likely see prices boom to record new highs. Despite all the smoke and mirrors, I've seen nothing to date which alters my view. The Sydney market is tight, supply is lagging and the population is booming by the year.
With interest rates now lower still and the banks cutting mortgage rates in a battle for business, it could yet end up being a complete stitch-up for those who predicted a market crash...a right bang-up job.