An accelerating recovery in key inner-city property markets on the back of the record low cash rate is prompting experts to warn of dangerous boom-time conditions as lenders up their ante for dominance in the lucrative mortgage market, according to The Australian.
McGrath Real Estate founder John McGrath said the pace of recovery in some property markets could lead to trouble, particularly in inner-city Sydney where it was "red hot", The Australian said.
"I haven't seen it (inner-city Sydney) this hot since the last real estate boom and I'm not calling this a real estate boom, but I think if the pressure kept going at this level . . . we're heading for trouble," he said, according to the newspaper.
"A bit of a growth spurt is a natural and welcome and healthy thing, it's bringing confidence in, but one would hope and expect that will settle into a more sustainable 5 to 8 per cent growth over a longer period."
The Reserve Bank of Australia last week cut the cash rate by 25 basis points to a new record low of 2.5 per cent.