www.economist.com/finance-and-economics/2013/08/29/house-of-horrors-part-2
...home prices are overvalued by about 25% or more in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden.
...Another concern is that Australia, Britain, Canada, the Netherlands, New Zealand, Spain and Sweden all have even higher household-debt burdens in relation to income than America did at the peak of its bubble. Overvalued prices and large debts leave households vulnerable to a rise in unemployment or higher mortgage rates. A credit crunch or recession could cause house prices to tumble in many more countries.
Yawn... 
What a load of shiz. People dictate what a house is worth, doesn,t matter if you put a huge price on a house, if there's no one around with that money you ain,t going to sell it. When any market booms it is normally because there is a shortage. Real estate is no different. Banks won,t let the RE market fall to much as they don,t want a heap of repo's on there books. Look at the Irish and Yanks economies then look at there housing prices.
There is not a shortage of houses per-se, there is a high demand due to a feeding frenzy. Investments into property with fairly high return and tax benefits for investment properties have been driving the prices up, and I hope this will continue. But 101 of economics tells a different story. The problem is that 30 years ago it took the average hard-working tradie about 6 years to pay off a house, today it's more like 25-30 years and over the next years that will result in slow growth.
Many will still see it as a good investment due to tax benefits but you'll find that more first home buyers will be opting to rent simply because they will never own the house anyway - and this trend has already started.
I am certainly hoping that my house will keep increasing but in reality I think we have seen the best years of or property boom. It doesn't look like the bubble will burst but double figure growthwill be far in-between while some areas will be struggling to have any growth at all.
I was recently talking about this to a mate of mine who is a professor of economics at a top Uni in Melbourne, so I'm not pulling it out of my a**
