Nearly every day in the Australian print media (Murdoch or Fairfax, the only 2 flavours) there will be an article claiming either 'House prices to go up 10% per annum forever' or 'house price crash imminent.' Presumably both of these statements are designed to attract the highest number of user comments as passionate home owners, property flippers and career renters weigh into the debate. Neither of these blitheringly stupid statements are correct. There are definitely parts of Australia where property prices could crash massively. Look at some of the resource towns, where prices are underpinned by one large mine/project. A shut of the mine will remove 90% of the reasons for living there (Ravensthorpe is a good example). New apartments in regional areas, massive MacMansions 50kms from Sydney, Melbourne, Brisbane selling for $1,000,000 are all vulnerable. Sensible investing in property is not as prone to correction. Good quality housing, close to public transports and major sources of stable employment or social utility (Hospitals, Universities etc) will not drop 40% because there will also be a demand for housing in these areas (both rental and purchase). If I own a house near a University that is currently renting for $600 a week (which I believe is worth about $600k based on the rental yield), I'm going to take some serious convincing that I should sell it for 40% less.
The value of any asset is not the possibility to sell it to someone else (capital gain) it is it's ability to produce income. Anything other than income based assessment of investment opportunities is speculating, which is very different to investing. At its worst speculating is like playing roulette or betting on horses, at its best it is like counting cards. Good for a while, if you're smart.