Sydney is in the grip of a housing bubble, Australia’s most-senior economic bureaucrat said in one of the strongest warnings yet by a government official.
“When you look at the housing price bubble evidence, it’s unequivocally the case in Sydney — unequivocally,” Treasury Secretary John Fraser said in testimony before a parliamentary committee in Canberra Monday. “Frankly, whatever the data says, just casual observation would tell you that’s the case.”
Home prices in Sydney rose 15 percent in May from a year earlier although they fell 0.7 percent from April, according to Corelogic RP Data. Australia’s major banks have said they will curb growth in home loans to investors after the country’s financial services regulator asked lenders to limit expansion of these mortgages to 10 percent a year. “It does worry me that the very, very low — historically low — levels of interest rates are encouraging people to perhaps over-invest in housing,” Fraser said.