"More importantly house price multiples have also expanded with median dwelling prices in Sydney now 10.3 times median household disposable income," Jonathan Mott said in a research note to clients, as quoted in Fairfax Media.
Dwelling values jumped 57% in Sydney and 42% in Melbourne since the pre-crisis levels of 2007.
The Financial Review reported among the banks that emerge to be big winners of the property boom, mortgage lender Westpac appeared to be on top of the investment property category with a $143bn loan book. Commonwealth Bank of Australia has the overall largest owner-occupier loan book at $230bn.
Mott added that "in Melbourne median prices are 8.2 times, while in Auckland prices are around 9.8 times median disposable income."
"While house price inflation increases the security value of the banks' mortgage back-book, new loans written against expensive housing assets may prove to deliver poorer credit outcomes in the event of an economic downturn," he said.
"Further, the mix of loans toward more overseas buyers and first home buyer investors may prove to have different credit outcomes to mortgages in previous cycles."
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