Via Mr Joye:
…as we look ahead, the RBA now knows that it can safely continue to chisel interest rates lower under the protective veil of APRA’s powerful suite of counter-measures that have a proven history of cauterising financial stability concerns.
This means that a repeat of a speculative, investor-driven bubble fuelled by loose lending is extremely unlikely.
Over the longer term, we should expect to see house price growth normalise back to a steady-state rate that tracks the change in per capita incomes.
Given incomes will barely rise that would be welcome. Once we pass the pent-up demand pulse that we are seeing today that’s a fair enough argument, so long as lending conditions do not ease materially or there is no external shock.
Two very big “ifs”.