Sydney in grip of housing bubble, says Treasury

Canberra

SYDNEY is in the grip of a housing bubble, Australia's most-senior economic bureaucrat said in one of the strongest warnings yet by a government official.

"When you look at the housing price bubble evidence, it's unequivocally the case in Sydney - unequivocally," Treasury Secretary John Fraser said in testimony before a parliamentary committee in Canberra on Monday. "Frankly, whatever the data says, just casual observation would tell you that's the case."

Home prices in Sydney rose 15 per cent in May from a year earlier although they fell 0.7 per cent from April, according to Corelogic RP Data. Australia's major banks have said they will curb growth in home loans to investors after the country's financial services regulator asked lenders to limit expansion of thes…