House prices relative to wages has increased markedly. Two fold plus, in Sydney and Melbourne must be three to four times.
Affordability is OK while interest rates are low, however, we hear that Australian banks are reliant on overseas capital. Also, overseas credit agencies are worried about Australia's real estate prices. A downgrade in credit ratings, withdrawal of capital would see Australian banks scrambling to increase capital levels. Increase interest rates would be on the cards, wouldn't they?
