Citywire has a good opinion piece on house prices this morning. Will they go up, down or stagnate? Who can say? Not me, but the below article summarises the issues quite nicely.
And what it boils down to is: all depends on the government. They have to steer a narrow path between too lax monetary policy, in which case we'll get inflation, and too tight in which case half the home owners in the country will be bankrupted by their mortgage payments.
Of course, there's no guarantee that this narrow path is actually wide enough to walk along; it could be that there's no path there at all and that one of Scylla or Charybdis is destined to eat us.