Now I'm old enough to remember the last property bust in the early nineties. Values got ahead of themselves and there was a correction. However, I also recall that for 2 or 3 years after the initial fall out prices failed to recover despite all the technical indicators pointing to them being cheap. Technical factors on price and affordability include:
1. Average house price to earnings ratio (specifically first time buyers earnings)
2. Mortgage availability
3. Proportion of income spent on mortgage payments
Even when all these suggest that prices have corrected there is one overriding factor required to propel prices up and that is.....CONFIDENCE. This is confidence of buyers to spend, confidence of lenders to lend, confidence of surveyors to sign of valuations of residential property. Until confidence returns which will be a long hard road technical factors remain a interesting irrelevance.
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