I don't have any answer to the biggest question you've posed: what type of asset is property most similar to.
I guess it's something that's treated like gold - buy and hold, always has intrinsic value, a shelter, rather than a growth (though maybe not the last one). Though I wonder what this implies - gold goes up and down in value - so what can we draw about housing from likening it to gold?
Like Dean I also wonder about the fragility in the housing market. What if rates went up 3% like he said? How would that affect Australia? What if prices halved? How would that affect people? Would it be a beneficial thing, or would it trigger something bad and disastrous? It's hard to know with so many people very exposed (that's something I'm assuming, I don't actually know how exposed people are).
My girlfriend and I have been talking about buying, I guess we go through the standard cliches: rent goes nowhere, maybe an apartment we own would be better/cheaper/easier for the short, mid and long terms, maybe renting is better as it's more flexible, maybe the 'bubble' will burst, maybe it won't.
It's a minefield, I don't feel confident about proceeding at all, but due to my gf's ambitions we'll be in Melbourne, Canberra or Sydney for sure.