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As I understand it, house prices did not move in tandem with the improving economy after the early 90s recession, but did boom some years later. I would be genuinely surprised to see house prices rise significantly in the next 5 years. I don't think the economy will be on the mend anytime soon...

I'm not sure what you mean here Ausprop...are you suggesting that houses are undervalued and prices will move north as interest rates do? If so, exactly how are you calculating houses are "below normal"? If anything I would expect increasing interest rates to put further strain on the already...