"""Will our banking system which is highly regulated be allowed to support such price so will the RBA bring in fiscal policy to address the bubble."""
Its already started.
The RBA jawboned the $AUD to bring it down under the implied threat of using policy to bring it down. It worked.
The RBA then warned homebuyers and SMSF to be "realistic" in their property expectations, even the IMF urged caution to the banks. If that doesn't work to lower expectations of future growth, then you can guarantee that policy will.
The bank share prices are the key indicator for the short term future of property, they are ahead of the game, and those watching close will have a small window to liquidate property holdings before the flood that will bring the market down
