Those advocating placing regulations on lending to the housing market received some ammunition on Tuesday from the Reserve Bank of Australia's latest stats showing stronger growth in lending to buy investment properties. It's the hot end of the market that has captured the attention of everyone from the banks to governments and most of all, buyers and sellers.
And it's placing plenty of pressure on the regulators and the Reserve Bank to intervene.
The increase in lending on investment properties is now running at its fastest for six years - indeed since before the global financial crisis.
We know the problem is not Australia-wide and that, even in the pressure-cooker housing markets of Sydney and Melbourne, demand for property is not uniform across suburbs.
And the boom is not spread evenly among all would-be buyers - the lending statistics on rates of growth for owner-occupiers are strong but rank well behind the growth in lending to housing investors.
Official figures show these rose 0.4 per cent in the month and 5.4 per cent from a year earlier, matching the quickest rise in more than two years.
Conversely RBA numbers on business lending were fairly weak.
The Reserve Bank is caught between a rock and hard place. It's unable to increase interest rates for fear it would be at the expense of economic growth but is concerned that the property market bubble could ultimately burst and create another large problem, a debt hangover for property buyers and a higher - potentially damaging - level of delinquencies for banks.
RBA governor Glenn Stevens has certainly been throwing out plenty of hints that something may need to be done. Suggestions borrowers would need to increase the proportion of the deposit relative to the value of the property appears to be gaining currency.
Last week the RBA said for the first time that it was working with the Australian Prudential Regulation Authority on "additional steps" to reinforce safe bank lending, particularly for lending for investors.
Different international markets have tried numerous methods or macro-prudential tools to cool lending, and it has worked to varying degrees. But the recent addition of New Zealand to the macro-prudential test participants has brought it closer to home.
Not surprisingly plenty of vested views have entered this discussion with myriad solutions.
Westpac chief economist Bill Evans commented last week that: "Given our outlook for credit growth and leverage, and our assessment of the preferences of the policy makers, there is no imminent prospect of macro-prudential policies being introduced in Australia.'
Bank of America Merrill Lynch's senior economist, Saul Eslake, lent his support to the view that getting rid of negative gearing holds the answer to cooling the property market.
Meanwhile AMP chief executive Craig Meller bought into debate on Tuesday revealing that he was in the camp that endorsed macro-prudential measures by the central bank to curb the steep rise in housing prices.
AMP is not a big player in the mortgage lending market. And he stressed this would not address the fundamental driver of residential property prices which is the lack of supply of new housing stock.
Meller said ongoing low interest rates were required to stimulated economic growth but these settings were driving investment in property which needed to be quelled.
The supply side solution advocates have been particularly vocal include Treasurer Joe Hockey, Senator Bob Day and Aussie Homes Loans founder John Symonds.
Grocery code's warts
With consultations on the proposed grocery code of conduct complete and now before the government, Australian Competition and Consumer Commission chairman Rod Sims has seized the opportunity to publicly highlight what he believes are its shortcomings.
If the government chooses to give the code the green light the commission will have no choice but to enforce it as is, warts and all.
It's an agreement nutted out between suppliers, the Australian Food and Grocery Council and the large supermarket chains Coles and Woolworths. The object of the code is to lay down some ground rules about how these big retailers must treat their suppliers and it was conceived in the wake of a litany of complaints about the behaviour of Coles and Woolworths and their dominant negotiating position.
Sims' issue is pretty clear. He will tell a grocery council forum today that he is concerned the protections contained in the code can be "traded away" through carve-outs negotiated between individual suppliers and retailers.
So why is it a problem if a particular supplier wants to forego its protections? Sims argues that the big retailers' power over suppliers could pressure them to opt out.
He says Australian suppliers have raised concerns relating to the unfair transfer of risk from supermarkets to suppliers and of unilateral changes to the terms of trade by supermarkets such that certainty of contract was lost.
This raises the question of whether the code will address the problems which industry has identified if norms of conduct in the code can be traded away rather than always be enforceable, according to Sims' address.
