From Bloxo today:
Still expect a soft landing Australia’s housing price growth picked up strongly in April and May, led by Sydney and Melbourne, following a pause around the turn of the year. Nationally, growth rose to 10% y-o-y in May, up from a rate of only 6% y-o-y in March.
The re-acceleration has raised some concerns that excessive housing market exuberance could be returning. Given the already strong gains in recent years in Sydney and Melbourne, the authorities have been seeking to cool the housing market in these cities. Sydney’s housing prices have risen by 57% and Melbourne’s prices are up 38% since mid-2012. A revival of housing market exuberance could be a problem for the Reserve Bank of Australia (RBA), as it could limit its willingness to cut the cash rate further, which may be needed to lift inflation back to target.
