Look what happened during the past 10 years......

House prices may surge about 20 per cent or more in some of Australia's largest cities over the next three years, driven higher by on-going shortages.

Sydney prices may jump 21 per cent in that period, while Melbourne prices may be 19 per cent higher.

The increases are likely even with the expected rebound in interest rates as the economy recovers. The Reserve Bank last week lifted official interest rates from near half-century lows to 3.25 per cent and signalled more rate rises to come.

"While interest rates are forecast to rise over 2010-2012, the outlook for the Australian housing market looks positive," said QBE LMI chief Ian Graham.

"The current low interest rates will be the main driver for the house price increases, which are expected to accelerate through to 2012, particularly in those markets with positive affordability and continuing under supply of housing."

Based on calculations from data contained in the report, provided by the Real Estate Institute of Australia and BIS Shrapnel, the median house price in Sydney increased by 101 per cent from June 1998 to June 2008.

Over the same 10 year period the median house price in Melbourne more than doubled, rising 116 per cent.

Brisbane values soared 202 per cent while Adelaide's increased 208 per cent during the same 10 year stretch. Perth's rose 211 per cent and Hobart's soared 203 per cent. The median house prices of Canberra increased 191 per cent, while in Darwin they increased 135 per cent.

The current household debt to income ratio is around 155 per cent, up from about 130 per cent at the time of the last RBA rate rising cycle in 2003, Westpac said today, in releasing the September consumer confidence number.

Rising home prices has been a contributor to household debt, analysts say.

"Corrections are not like share market corrections, where people sell off all their shares"

"People just sit in the property and wait for things to improve. You don't have this turnover, aside from people who are forced to sell." (Angie Zigomanis - Bis Schrapnel Senior Project Manager)

(Information supplied by Chris Zappone - The Age Newspaper)