There are multiple factors that affect house price increases.

One key factor we need to look at is, who are the buyers driving the current market. The current upswing in house prices is supported by the fact that owner occupiers are driving the sales, not investors.

Current Investor activity is well below the 10 year average. For example, W.A. historically sees around 26% of property transactions going to investors, we are currently sitting at around 16% of investor transactions. 

All other states are seeing the same trend, although investor activity has seen recent increases.

What does this mean? 

When a market sees a high influx of investors this can create a vulnerable market. When there is a change in the economic climate, this may trigger a sell off amongst investors which in turn creates an oversupply and subsequently, a fall in house prices.

Owner occupiers tend to hold property through tough times which creates a support for house prices and reduce fluctuations in the market.

Predicting the future of the market is complex and there are many factors that affect the outcome. We can look at various metrics, leading indicators and lending policy amongst many other things that may give us some foresight to what the future has in store. 

At this stage I believe the current house price increases still have some track to run in many markets and also hold a strong support base. 
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Let’s just say we are safe as houses :)