The strong price gains in sectors of the Australian housing market have been a concern for the Reserve Bank of Australia.
The concern from the bank is that the rapid price rises in Sydney and Melbourne leads to buyers in those cities taking on high debt loads, which then exposes these buyers to risk if prices, for whatever reason, turn lower.
With me so far?
OK, the bank doesn't give two hoots about the people who have paid too much and borrowed too much ... what the bank is concerned about is that if these people come under repayment stress they'll cut back their spending elsewhere, which would have a negative impact on the economy as a whole (and it is this that is a concern for the bank).
So ... this will be welcome news at the RBA:
- Economists say there are clear signs the "super energy" of the Sydney housing market has passed.
- Figures from the Domain Group show auction clearance rates are the lowest in three years.
That's from the ABC here in Australia. Link for much more.
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Which brings me to ... (yes, an awesome segue coming up)
Australian House Price Index for Q2 is due today at 0130GMT
- For the q/q, expected is +2.3% and prior was 1.6%
- For the y/y, expected is 8.0%, prior was 6.9%
