A year ago, consumer groups were criticizing the turn-around in the home lending business which had seen the major banks emerge from the economic crisis with a huge gain in their home lending business. Now, the second tier lenders are finally showing good growth following a thawing in funding markets. Among the main reasons is the newly-found viability in residential mortgage-backed securities which nearly dried up in Australia during late 2007.

The incredible rise in house prices in nearly all states last year cannot be matched in 2010, according to industry experts. The unprecedented leap of nearly 14 percent in the price of houses in 2009 was well above forecasts. And now those same observers are saying a combination of economic conditions and rising interest rates has to result in very little further price rises this year.

Recent auction results revealed nearly half a million dollars was paid for a small timber beach box on Port Phillip bay. Needless to say, such examples of crazy prices are forcing inevitable predictions of another house price bubble.