From the AFR:
The Reserve Bank of Australia is weighing up whether to force banks to adopt New Zealand-style limits on mortgage lending to cool an overheating housing market.
…Joe Hockey conceded on Thursday there were “clearly significant” price gains in parts of Sydney, Melbourne and “to some degree” in Brisbane…“obviously the Reserve Bank will look at some of the macro-prudential issues”.
…“I don’t really accept this suggestion that if there is a boom that government needs to step in immediately to try control the speed [of the price gains],” he said. “Hopefully you’ll see an increase in supply in relation to housing that will help to address [the price level].”
If government causes the distortion, government should fix the distortion.
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