Anybody talking on a mortgage based on the recent rate cut is an idiot...unless they managed to buy well at one of the MANY 'mortgagee in possession' auctions that are going on now. Home repossessions are at historical highs and have been for a year or more...many of these auctions have seen houses sold for 50% of what they were thought to be worth as recently as 6 mths ago.
With a goodly sized deposit and in the above circumstances and assuming you were buying something you absolutely loved and wanted as a home, as opposed to an investment, you might be ok.
Housing bubbles are the worst kinds of asset bubbles because of the time it takes to work out of the system, for prices to bottom - and demand to be stimulated again - and for people to get over their fear let alone be able to afford to buy at all.
The dot com bubble was hardly noticed by the average man in the street as an example...this housing bubble will be very different.
That is what makes the policy settings (low interest rates/relaxed or non enforced lending guidelines) put in place by our idiot elected officials, that promote bubbles, even more idiotic.