Wages - average house prices are about ten times average wages, it used to be about four times. It's completely unsustainable and home ownership for the masses will not be sustainable in the future if they are not revalued. But that would destroy the economy. Something will have to give at some point.
The price/average earnings ratio has already moved back quite a long way since the peak in around 2007/08, so we're already some way down that road. The point of my original comment was that it would be madness for prices to return to that situation; and not that they are still there. The bubble has been slowly deflating for some time with respect to earnings.
It's a very complex situation affected by average earnings, employment levels, interest rates and mortgage availability (amongst other things). Prices are also affected by population change and a shocking housing shortage (being exacerbated by the inadequate number of houses being built each year), both of which - in my humble view - mean that the accepted historic average of 4x earnings doesn't mean a lot any more.
