Even though real estate mortgage lending remains the only credit category demonstrating vibrant double digit growth there is no compelling evidence of overheating in the property market. According to data provided by private valuators, the estimated median price of a typical 3-bedoom today is about 10 per cent lower than the peak in median house prices in early 2012.
Moreover, the announcement of fully specified consolidation measures for 2012 and beyond would help to convince the general public and market participants that the corrective policies will be sustained. Strengthened confidence in the sustainability of public finances is key, as this will reduce interest rate risk premia and improve the conditions for sound and sustainable growth.