I'd say save as much as you can. If you can save the 20% deposit, you dont pay mortgage insurance. You're also seen as a better risk for the banks than the 95% loans. So many people who've taken out those kind of loans get into repayment trouble.

Have a look at things like the barefoot investor, money magazine etc. I can recommend a financial advisor if you'd like to talk to one.

Assuming prices will go up or down is speculating/ gambling. I'd look at finding investment property that will produce a positive income. If you're not going to live in it, I'd look at rental returns in rural centres and compare to Melbourne. I'm pretty sure you can get a better return outside of Melb.