The result has been strong growth in borrowing by investors, with investors accounting for 30 to 40 per cent of new loans. This borrowing is not the underlying cause of the higher housing prices. But the borrowing has added to the upward pressure on prices caused by the underlying supply-demand dynamics.
It has acted as a financial amplifier in some cities, adding to the already upward pressure on prices. The borrowing by investors is also obviously contributing to the rise in the aggregate debtto-income ratio. Just like in the early 2000s, there is again a discussion as to whether these increases will continue and whether they are sustainable.