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What I meant was that the banks do not appear to be pricing in higher costs of capital. They doubled the RBA rate increases during the GFC when money market funds starting drying up. The banks' offshore borrowing costs did increase, but part of the domestic rate increase was a result of pricing...

I've been thinking that one of the main risks to the market right now is global credit restricting again. If Oz banks are easing up on rates & loans, perhaps they see no problems rolling over their o/s debt.

:eek: Have they done a deal with the Gov't where the latter underwrites some of the risk or something?? High LVR = high risk Max LVR = max risk FHB = No equity behind them nor history of being able to meet payments New homes = new estates where greater possibility of overpaying for builders'...

WOW! 125%?! That is unbelievable. In fact, i actually had to click the hyperlink to confirm is was true. As far as comparisons with what eventuated in the UK property market - i'm not worried. I watched a re-run of Location Location a few nights back where Kirsty said of the buyers, "In the 9...