After a brief and shallow dip at the height of the Covid pandemic last year, house prices in Australia have come roaring back to life, scaling new heights.
Interest rates set to remain at record lows for the next three years and households awash with stimulus cash have combined to intensify the ever-present fear of missing out in Australia's housing markets, pushing prices higher.
Sydney house prices surged 3.6 per cent in March, the fastest rise in more than 30 years, and prices in other cities weren't far behind, with Melbourne climbing 2.2 per cent and Brisbane up 2.4 per cent.
In the first three months of 2021, Sydney's dwelling prices have risen 6.7 per cent, with Melbourne up 4.9 per cent.
This raises two questions – does Australia need to do something about house prices and if so, who should do it?
At the moment, everyone is ducking for cover.
The Australian Prudential Regulation Authority has the power to change the rules around lending and make it tougher for Australians to get credit, slowing the housing market.
But its job is primarily to ensure the stability of the banking system and it doesn't believe there is excessive risk taking that could threaten the banking system.
"It's not our job to solve house prices," APRA chair Wayne Byres told a parliamentary committee last week. "The extent to which there is a dynamic emerging of increased risk taking in the community … at this stage, it's not evident."
This despite residential home lending across the banking system lifting by 44 per cent year-on-year in January. At the same time wages have barely moved and while the economy has bounced back, lending growth outstrips it by more than a factor of 10.
Household net wealth has risen to an average wealth per person of A$467,709, but the bulk of the rise is thanks to property prices, so it's a circular argument.
With APRA bowing out, what about Australia's other financial regulator, the Reserve Bank of Australia?
Like APRA, the RBA doesn't have any specific mandate to reduce house prices. It adjusts interest rates to achieve its goals of price stability, full employment and the economic prosperity and welfare of the Australian people. While this could include house prices if the RBA believed the housing market was an asset bubble, this is not the current view or RBA governor Philip Lowe.
He is more concerned with keeping rates low to support the economic recovery and to pursue full employment growth, so there's no chance interest rates will be raised to cool the housing market.
Economists expect the RBA will move to cool the housing market by limiting the number of high loan-to-value loans can issue and increasing the number of lower loan-to-value loans, which would reduce the supply of credit. It could also require building in higher interest rate buffers imposed on loans.
In the meantime, ANZ bank expects Sydney house prices to rise 17 per cent this year.
The median house price in Australia's largest city already A$1,112,671, up about $50,000 since February. Further increases would put home ownership even further out of reach of young Australians.
This is the biggest and immediate problem with rising house prices – widening the wealth divide between those who were lucky enough to get into the housing market a few years ago and younger people who no longer have that opportunity.
And this is a problem for the government to solve.
But so far it has shown no willingness to do so. While the New Zealand Government is trying to bring down house prices, the Australian government has abdicated its responsibility.
At an event organised by the Chartered Accountants Australia and New Zealand featuring NZ Finance Minister Grant Robertson and his Australian counterpart Josh Frydenberg earlier this month, the difference couldn't be more obvious.
Robertson said the Government is looking to take further measures to tilt the balance more in favour of first home buyers.
Frydenberg, by contrast, made some motherhood statements about the importance of home ownership and added: "In terms of rising house prices, that is good news for the economy because people's homes are normally their single largest asset."
His government is more interested in protecting the interests of existing homeowners than helping more people get into the market.
