Real housing prices are now just 1% below their 2006 peak. So it's no longer clearly true that houses were greatly overvalued in 2006. Instead, other theories are equally plausible. Perhaps NIMBYism combined with permanently lower interest rates does justify permanently higher real house prices in the 21st century.  Perhaps the 2006 immigration crackdown and the subsequent tightening lending standards and the steep drop in NGDP during 2008-09 caused the slump, and house prices are now returning to their appropriate level.