Are we headed for a housing bubble? Secret documents show that Reserve Bank of Australia analysts are concerned about the prospect, and late last year raised concerns about the danger of ignoring surging home prices.
RBA documents disclosed under the Freedom of Information Act show that RBA analysts said the cost of inaction when it comes to the housing sector may be very high, reports The Australian Financial Review. The RBA has, along with the Australian Prudential Regulation Authority, tried to curb further lending to property investors. In December, the RBA directed banks to set a pace of 10 percent growth in investment lending on property as a sustainable figure, but in March the figure jumped to 21 percent from a year earlier. There were $12.9 billion in loans to investors in March, official figures show.
Prevailing high household debt levels are a concern for the housing sector.