Bubbles are caused by cheap credit. See US after dot com implosion - rates were lowered way too much for way too long. The advent of MBS's meant that loan originators didn't have to 'keep' the loans on their books anymore - they sold them on (for fees) to bigger institutions, who packaged them into MBS's (for fees) and sold them off. Not wanting to lose their fees (and bonuses), participants all the way up the line found ways to keep making / packaging / selling more and more loans to more and more borderline customers (who were either greedy, liars or duped).
The common sentiment was that housing could not crash nationwide as it had never done so before, and further, there were only a handful of people who actually understood how the housing bond market worked. Even CEO's of the biggest funds had no idea. They just knew packaging them up and selling them on was very very profitable.
Australia survived the 2008 meltdown, largely due to Chinese stimulus and demand for resources. However it did see an eventual drop in interest rates as global demand slowed in every sector apart from mining. Wage growth has gone nowhere even close to matching house price growth. Low wages hasn't led to less real estate being bought, it has seen people go into more and more debt (check out household debt to gdp stats). Credit is cheap and easy to get. The upswing in housing prices comes from record interest rate lows coupled with a stable job market (now ex perth, Darwin). Wages may not have gone up in years but the cost of servicing a loan has lowered (until recently) - even when you traded off low rates vs price increases.
The problem for Sydney now is that yields are well below inflation, so there is no logical reason to buy as an investor other than chasing capital gains. it is a mania, and has become so unaffordable that a large % of wages now go to mortgage debt. The result is that the retail sector is dying. Rents are high but demand is weak because most of it goes to paying off the banks.
If rates were to rise even 1%, around 20% of households would be screwed, in severe mortgage stress. Australia doesn't control the wholesale rate it pays for credit, that it mostly driven by the wholesale markets. On top of that, Australia's banks are heavily weighted towards residential mortgages, some have over 40% assets in interest only loans and property makes up nearly half of the banks assets. Its an accident waiting to happen.
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Home loan standards are being reduced worldwide as a form of damage control to compensate for falling wages.
Cheap credit isn't a primary cause, its a symptom of underlying issues involving growing wealth and wage inequality, a higher inefficient tax burden strangling economic growth and prosperity with increasingly restrictive regulations which strangle the livelihood of small businesses we rely upon to create jobs.
) the real estate market has been down for at least 6 months with prices falling even. 
