"just because the price of housing goes up it doesnt mean lending practices have been lax---there are other factors involved--"
it does if the new price of the dwelling creates a very low rental yield
"you state yourself ""the pool of new buyers drys up""----that isnt going to happen in australia for a significant period of time"
completely disagree, you are defining the pool of buyers as people who want a dwelling and need a dwelling as apposed to someone who will be able to get a loan for a property
as prices rise sharply the only way these wannabe buyers will qualify is if lending standards are loosened.
now an example to illustrate that point - when english migrants came here pre GFC they sold their homes and bought very nice homes here. now the average home sold in the UK and then a home bought here is probably a downgrade not an upgrade - that pool of new buyers would definitely have shrunk
