Even adjusting for inflation, housing prices have risen by roughly 12 per cent over the past year in the major cities, and by not much less in regional areas. This paper looks at the implications.
The paper concludes that the recent data suggest that we are not experiencing a credit-fuelled speculative boom. It would not be desirable for the current situation to turn into one, so it will be important for lenders to remain prudent in their standards. It will be equally important for prospective borrowers to have realistic expectations, and not to rely on a hoped-for capital gain in order to service their debts.