a counterpoint to this is if there is a combination of high demand (due to demand, jobs) low supply (zoning laws etc.) then this causes the fuel to higher house

a counterpoint to this is if there is a combination of high demand (due to demand, jobs) low supply (zoning laws etc.) then this causes the fuel to higher house prices. The real estate agents and sellers are the spark by trying for higher prices, or skilfully marketed auctions (in the case of Australia). another counterpoint is expectation adjustment. If $1m buys you a house today but $1m buys only an apartment in 10 years time, then it still buys a home where a family can live and the same wages at the same interest rate can support it, but land prices have clearly increased in that situation. Taking Sydney as an example: you can move away to cheaper areas but enjoy your long commute and/or low paid job (or no job). I am sure the same is true of many capital cities. (Sydney is the capital of NSW before you correct me :-))