Sydney home prices may have surged, but even Australia's top policy makers can't agree on whether the market is a bubble.
"A lot of people have trouble identifying what a bubble is," Peter Churchouse, publisher of the Asia Hard Assets Report, said, noting that even as late as 2007 then - U.S. Federal Reserve chief Ben Bernanke commented that he didn't see a housing bubble in the U.S.
It's a debate that came in to focus in Australia this week. In a quick point-counterpoint, Australian Treasurer Joe Hockey denied Tuesday the country faced a property bubble, adding that "if housing were unaffordable in Sydney, no one would be buying it " and that first home buyers should get "a good job that pays good money" if they wanted to enter the housing market.
But on Wednesday, Reserve Bank of Australia (RBA) Governor Glenn Stevens said Sydney home prices were "crazy" and "acutely concerning."
"The issue is politicians, in general, like the idea of Australian property prices going up. There's the wealth effect attached to it," Tony Farnham, an economist at Patersons, said. "From the regulatory side of things … it's not just RBA Governor Stevens who's said to see frothy components."
Earlier this month, the country's Treasury Secretary John Fraser told a Senate hearing that Sydney housing was "unequivocally" in bubble territory.
That prices in the capital of New South Wales have surged isn't in dispute. The asking price for all housing units in Sydney is up 11-12 percent over the past year and 25-29 percent over the past three years, according to data from SQM Research. The median asking price for a house in Sydney is around 1.1 million Australian dollars ($850,000), the data show.