Devo76, you'd have to be earning twice the median household income for the median house to start to look affordable. This is a chart showing income distribution in Australia.
Assuming Sydney household incomes follow a similar distribution, you'd need to be in the top 10% of earners to afford a pretty average place.
I agree about cycles, but don't think this is a great point to buy into the market.
Ruroshin, a quick Google suggests that the median mortgage in NSW is
$309,200 (or $455,649 in the comments). Not sure if this is median or mean, and I'm guessing it would be higher in Sydney, but would suggest most people have $200K to $300K worth of equity in their property. That would be the deposit.
Mortgageman, new build Australian properties are something like three times the size of those in the UK. But I'd argue that building standards are higher in Britain (I'm not trying to start a flame war here), which would cost more.
It'd be interesting to compare land prices too. Historically a new build in the UK was roughly a third land, a third construction costs and a third profit for the builder, though more recently it's been 50% land, 25% construction costs, 25% profit.
I saw an Australian homes programme on TV here the other day, and an architect's house in a coastal suburb just outside Adelaide costs broke down as two thirds on construction, one third on land. (Being a self-build to live in there wasn't profit.) That would suggest that it costs more to put up a house, but less for the earth to put it on.