Ireland learned from this experience and to reduce likelihood of further property bubbles the Irish Central Bank announced restrictions on mortgage lending.
In Ireland mortgages are capped at 3.5 times gross annual salary, yet in Australia banks are happy to loan 6 times gross annual salary. Why is our Australian regulator APRA allowing this property bubble to continue?
Furthermore Ireland has much lower standard variable interest rates (3.5% Ireland, 5.22% Australia).
http://www.dailytelegraph.com.au/newslocal/northern-beaches/homebuyers-are-routinely-borrowing-1-million-to-secure-a-house-on-the-northern-beaches/news-story/93979cd4f45a8b7641b50ec3224ff987
Mark Bushell, of LJ Hooker Dee Why, said young borrowers, aged between 25 and 45 are borrowing six times their annual gross salary.
Ireland:
https://www.centralbank.ie/stability/MacroprudentialPol/Pages/LoantoValueLoantoIncome.aspx
Australia - Here are some examples with Australia's largest bank willing to loan over 6 times gross annual salary:
https://www.commbank.com.au/digital/home-buying/calculator/how-much-can-i-borrow
A. Single income of $100K/year - can borrow 5.98 x gross salary
B. Single income of $200K/year - can borrow 6.42 x gross salary
C. Joint income of $200K/year - can borrow 5.825 x gross salary
On $1.2 million dollar loan there is $1.177m on interest at interest rate of 5.22%:
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