Home-price surge spurs RBA loan-policy rethink

[SYDNEY] To see why Australia's central bank has had a change of heart on home lending curbs, look no further than Sydney's inner city where a one-bedroom apartment sold at the weekend for 35 per cent more than its last price in 2012.

The 581-square-foot property in Surry Hills was purchased by an investor for A$647,000 (S$718,000), said Con Fotaras, a sales consultant at Belle Property Surry Hills who brokered the transaction. "It's really hard to put a price on a property at the moment," he said of a Sydney market where the median home price is higher than in New York.

Policymakers have taken a U-turn on their past dismissals of macroprudential measures as they seek to slow lending to investors in a market that the Reserve Bank of Australia (RBA) has described as "unbalanced".