The decision on when's good to buy should be a personal choice based on your own circumstances. If everybody took that attitute we could begin to treat homes as homes rather than a financial commodity. A stabilisation of prices to long term natural levels (which is in the broad national interest) would follow.
We do have some demographic skews in cohorts of people being born each year ranging from 50,000 to 70,000 in recent years. Based on this, the most variance in "natural" demand for housing units should be 25,000 to 35,000 in any given year.
The problem starts when you have unnatural situations including a massive increase in people looking to buy rental properties, the 30-35 year old "sex and the city" generation of females who suddenly believed a 25 year old single girl needed to own their own apartment, banks throwing silly money at people, etc.
Overall if we can mature as a people in terms of attitudes towards home ownerships, there should be 30,000 couples per annum looking to get their own place creating a long term demand for the same number of housing units to be built once the overhang is used up.
Building 90,000 units p.a. is very clearly unsustainable, but equally we can't brand every couple around the 30ish age mark as fools for wanting to get a place, there is no logical conclusion in believing people in this demographic should never again think about home ownership because of the madness of the last decade.