It is the flood of money coming into the system that's lifting prices, cost of debt is lower and the servicing caps have gone from 7% to 5%. The number of home loan applications are increasing, that's new money.
If you want to argue that its more economical to service loans at low rates than high rates, that's fine. But to suggest prices are only up due to serviceability is complete folly. We have new buyers in the system, ex-pats and those who previously couldn't afford due to responsible lending laws.
with rates set to be lower for longer only an idiot would suggest house prices are artificially inflated, value is relative to economic conditions, always will be.
