From the AFR:
The International Monetary Fund will investigate any risks posed by surging housing prices when it sends a team of economists to Australia later this year.
The IMF is scheduled to conduct its annual Article IV consultation on the Australian economy in November, with financial stability and the hot housing market expected to be key issues analysed.
The timing of the visit will coincide with an ongoing debate among investors, banks and regulators about whether low interest rates are inflating a dangerous house price bubble. The Reserve Bank’s quarterly financial stability review, to be released on Wednesday, will provide more guidance about the bank’s views on the market.
News of the visit comes after the IMF this month urged regulators around the world to consider using so-called macroprudential tools, such as limits on loan-to-valuation ratios or increased bank capital requirements, to prevent banks fuelling house price bubbles.
Former Reserve Bank of Australia board member Bob Gregory said this month that a property bubble seemed “inevitable” and Melbourne University professor Ross Garnaut said making banks set aside extra capital would be “simple and logical”.
Some offshore hedge funds are betting that Australian bank share prices will fall, amid concerns over exposure to a potentially over-heating housing market.
I’m not sure that this article is anything but scuttlebutt. There’s no new quotes from anyone.
