There’s a fascinating lecture by David Miles on the prospects for houses prices – over the next 100 years. He’s really examining whether it is possible that house prices can continue to grow faster than incomes thereby becoming less and less affordable. He thinks that they can.
Under plausible sets of parameters, under a simple long run preferences growth model house prices can rise continually relative to income.
Best to listen to him make his case himself. Has lots to say about the interaction of land markets, building technologies, transport technologies and, crucially, our attitudes to high density living.