House prices have risen over 1,000% since 1970 in nominal terms. But the journey has not been straight. Several significant corrections have caught overleveraged buyers off guard.\n\nThe 1989-1995 Crash — Interest rates rose from 7.5% to 15% in just over a year. Prices fell roughly 20% and took until 1999 to recover in real terms. Negative equity affected 1.8 million homeowners. Repossessions peaked at over 75,000 in 1991.\n\nThe 2007-2009 Crash — The global financial crisis caused prices to fall approximately 20% peak to trough. Recovery was faster, with prices regaining their peak by 2013-2014 in many areas. Driven by reckless lending (100% and 125% LTV mortgages) and collapsing credit markets.\n\nThe COVID Dip and Boom — A brief 1% dip in spring 2020 was followed by a 25% surge driven by stamp duty holidays, lifestyle changes, and ultra-low rates before cooling as rates normalised.\n\nCommon Patterns — Easy credit fuels growth. Sentiment becomes euphoric. Prices detach from earnings. A trigger tightens credit. Prices correct 15% to 20%. Recovery takes 5 to 7 years. Every past correction has been followed by prices exceeding the previous peak.\n\nWhat This Means — Time in the market matters more than timing for owner-occupiers buying for 10+ years. For investors, buying during corrections when sentiment is negative has produced the best returns. Overleveraging at peaks is the single biggest risk.\n\nIndicators to Watch — House price to earnings ratios (long-run average 4-5x, currently 7-8x). Mortgage approval volumes. Inventory levels. Time to sell. Rental yields versus mortgage rates.