The theory of an Australian housing market bubble shows all signs of a proper religion. There are rituals like the recurring publication of house price indices. There are miracles when house prices rise despite interest rate hikes. Then there are true believers in the theory that Australian house prices are not in any way exaggerated. And finally there are heretics who take great pleasure in questioning just that.

Whether you believe in an Australian housing bubble or not, it is unlikely that any particular set of data will convince you of the opposite. Again, this sounds more like religion than the basis for a dispassionate analysis. The housing market may not yet promise salvation or eternal life but the debates about it couldn’t be fiercer if it did.

Without wishing to upset anyone’s semi-religious feelings, I think it is time to deflate one of the great myths of the housing market. It is the myth that restricted supply is a guarantee for ever-rising house prices.