Affordability can have dramatic impact: Dickens

Responses to housing becoming unaffordable range from young couples staying or moving in with parents, those with spare rooms renting them to help pay the mortgage or rent and retired people, perhaps hit by finance company failures, moving in with their kids or with each other, Dickens says.

Other people may convert garages to living quarters or move mobile homes onto their properties to house children or in-laws.

"It only takes a small increase in the number of people per house to result in a significant reduction of houses required to house the population which translates into a large fall in demand for new housing," he says.

At the beginning of the latest housing market boom, back in 2002, the average house cost the average employee about 4.5 times their annual gross income - the average house price was $167,000 and the average annual gross wage was $36,000.