Treasury officials fear housing bubble

A treasury official had advised the government that the possibility of house price depreciation, the so-called popping of the bubble, is the ‘elephant in the room’ of the Australian economy and is a risk that must be taken seriously. A group of senior treasury managers discussed the issue and the risks of debt to the economy in a series of important emails laying the groundwork for the advice to the new government.

The emails reveal that the officials fear international financial shocks or other causes could combine with high household debt to cause severe shocks in the economy.

Source: The Australian