Via the good Captain today in Parliament:
The RBA does not – and should not – target housing prices. Instead our focus is on the lending that is used to purchase housing.
There are many moving parts here at present: record low interest rates; a shift in preferences towards houses and regional locations; large government incentives for first home buyers; the slowest population growth in a century; very high rates of house building; and a decline in apartment rents in Sydney and Melbourne.
Housing prices are now rising across most of the country. Even so, the national housing price index is only around the level reached 4 years ago.
If credit growth is the metric to watch, and it is, then house prices are going to run for years (though not very hot in Melbourne and Sydney before the millions of warm bodies return):
And when the tightening comes, it will be macroprudential not the cash rate.
Party on, dude!