Hitler’s propaganda chief, Joseph Goebbels, is believed to have devised the notion that if you create a big and audacious enough lie, and repeat that lie continually, people will inevitably believe it. Perhaps the "big lie" theory also explains how financial bubbles, seemingly so foolish (especially in hindsight) are able to inflate. If enough "experts" and journalists continue to repeat the same untruths -- eventually, those myths will be taken as lore. We saw this with the dot.com bubble in the late 1990s, the sharemarket bubble of 2002-07 and more recently, the residential property boom in Australia.
While government policy (specifically the first home-owner’s grant, negative gearing and concessional capital gains) coupled with lax bank lending standards have facilitated the property boom -- it is the panicked buying of many young Australians (and overseas investors) that has allowed Australian residential property to increase by 10% between January and October this year. This increase came despite Australia probably still being in recession (if growth is measured on a "per capita" basis). In fact, residential property is virtually more expensive than ever on a relative basis -- Australian capital city residential properties are trading at around six times average household disposable income -- about double their historical level (and also double the prevailing level in the United States).