Even adjusting these prices for today's inflation the properties for sale now are extremely overpriced. Why should someone be penalised because they didn't buy a house at the right time, ie, when prices were, well, normal?
Which inflation calculator did you use?
I tried the Reserve Bank's one and for $300,000 in 2002 it came back as $1,361,000 now
That would imply an average compounding inflation rate of 7.5% which doesn't sound right.