All bubbles pop buddy - there are no exceptions.
Mining doesn't directly benefit anyone, so I fail to see how or why it would save the bubble from popping.
Your reasoning is sound SCM, however I can only go from experience and limited financial knowledge.
There is definately a housing bubble and the slide will continue, it is where the slide and the inflationary rise of disposable income intersect that I think about.
I know my wages in the same position tripled over the last 15 years, I heard on the radio the other day the average wage of teachers will be nearly $100k. Most tradesmen I know in the non mining sector, that are on wages are earning $100k. Council workers are on $70k with O/T.
It won't take long, if inflation cpi and interest rates stay low, for the slack to be taken up.
In Perth outer suburbs an established 3 bed 1 bath on 700m2 is selling for $250-300k. If by your reasoning, they will go down another 50% that will make them awefully cheap.
The suburbs about 10-15k's out entry prices are around $350-400k, but realistically these are 2nd home buyer areas.
Again I can't see them going down another 50%, not unless interest rates start and climb appreciably. I remember when I purchased my second house the interest rate was 19%, now that would certainly put everything in a tail spin. But I can't see that happening.
I know the average loan is high but is that due to peoples expectations exceeding their income. Maybe people will have to go back to buying a starter home first rather than buying what in reality should have been their 2nd or even 3rd home. Maybe a lot of people will have to take one step back, which would probably put them where they in reality should be.
That's one problem with the have to have it now and won't take second best mentality.