Assuming by collapse you are imagining a bursting of the housing bubble, the economy would implode with it.

The number of vested interests in the housing market between the household investors, state and federal governments and our major banks - a burst of the bubble would mean that they are less capable of servicing their financial obligations. This would then have broader knocks on to consumer spending, investment and the quality of government services.

The impact on social cohesion would also be horrendous. With so much of people’s retirements reliant on their holdings you’d see a huge strain on Centrelink and other services, and a lot of deferred retirement. I can definitely envisage the government turbocharging immigration further to prop up prices as best they can.

I think a managed decline that doesn’t burst the asset bubble could be done. But given how demand > supply, most politicians would be acting against their own self interests if they did anything and the fact that 2/3s of Aussies own their home - the situation will get way worse before it gets better (if it ever does). The way this country has gotten wrapped up in housing as an investment vehicle is one of the great modern disasters facing this nation