You would had to have been living under a rock not to notice the global housing boom of the past decade. When the housing sector was first generating heat, analysts and financial planners were falling over themselves to advise people to invest in property – a “sure thing”, they said.

The consequent ending of the boom has brought out the naysayers, who predict massive falls in property prices, causing a domino effect throughout the rest of the economy. These nervous nellies make perfect sense – after growing at such a nuclear rate, house prices have to fall, which will make a lot of consumers cautious about the economy, suppressing spending levels and sending the economy into recession.

But the truth of the matter is that, even in the previously hottest markets globally, this has not occurred. House prices are rusting, not busting.

Last October, Fed Chairman Ben Bernanke said there was a “serious correction” in the US housing market underway, but now, only six months later, he is predicting, albeit tentatively, a housing recovery.

The UK housing market was predicted to show losses of around 30% by some of the greatest pessimists, but this has simply not occurred.

Perth is an obvious case in point – in the December quarter house price growth slowed to 1.7% in the Perth market after rising 10.1% the previous quarter. But even if there is going to be a correction of, say, 20-30% in Australia’s mining boom headquarters, investors and home owners are still well and truly ahead, having benefited from a doubling in prices over the past few years.

Housing’s slowdown has been and will continue to be relatively mild compared with past downturns, although it must be said that it is more serious in some regions. Why? It’s taking place at a time when the economy is growing at 3%. Unemployment continues to be low. Monetary policy is mildly constricting at best – no credit squeeze, just a gentle removal of excessive ease.

It is always worth remembering that central bankers are almost universally home owners too, and enjoy a property bubble along with most of the rest of us. They dislike seeing their house prices fall just like the rest of us folk. Conflict of interest? Wash your mouth out with Lysol you silly fellow.

The soft-landing-for-housing-story seems pretty widespread. The pink paper, the famous FT, recently quoted a bright analyst with a new angle on the US scene:

Since last summer’s low, prompted by the slump in demand for newly built homes, shares in the big homebuilding groups have been on the mend.

The S&P Homebuilders Index, which sank 45% last year to a low of 702 in July, has moved up by 27.5% in the past seven months.

Time is the ultimate healer in the housing market,” said Chris Hussey …

And the stock market is likely to anticipate the healing before signs that the bleeding has stopped.

Any stock tips for Australia, Mr Hussey?

Read more at Henry Thornton.