The primary cause of high house prices is the low cost of money. Falling interest rates, first home buyers grants and negative gearing make it easier to buy a more expensive house so prices go up.
http://www.macrobusiness.com.au/2013...operty-values/
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Despite the best efforts of the National Housing Supply Council (NHSC) and the FIRE sector to spruik a housing shortage, the long-term trends show dwelling growth has consistently outpaced population growth since WW2"