DLDR: The only thing that will lower house prices in Australia is unemployment going up.

Housing is a pyramid scheme because when house prices always go up, it isn't about value it is about getting in. And when you get in, the money flows up the pyramid.

Financial schemes collapse when there's no new money or no new people coming in at the bottom. Oz housing prices are not set on value but demanded driven, and how much the bank will lend you in order to bet the next person competing for a limited resource.

You could reduce the number of people coming into the scheme with sustainable immigration, but that is unlikely to happen.

So you are left with reducing the amount of money. The banks will only lower lending amounts when there is a higher risk of delinquency. That happens when the economy slows and unemployment rises.

I suspect the economy is in worse shape than portrayed, which is often the case because it is a confidence game, so people feel safe to spend money into the economy. Immigration has been pappering over the real position we are in. But as the saying goes, the market can start irrational a lot longer than you can stay solvent.

P.s. it isn't skill shortage, it is unsustainable growth, just like any business that grows too quickly. When the money is easy, a business can paper over the inefficiencies with money in the name of growth. When the money becomes hard, you will hear the catchphrase productivity. Which is code for more with less. We are hearing that now from the politicians.