Australian housing prices keep getting higher and one investment banker has bad news for most aspiring home owners: the government will do nothing to prick the bubble because the country simply can't afford it.
Houses and apartments in Australia, particularly Sydney and Melbourne, have never been more expensive. The median house price in Sydney hit $1 million in   July, said the Domain House Price Report, and investment bank Goldman Sachs estimates the markets in Sydney and Melbourne are almost 20 per cent overvalued.
House prices are on track to rise by a whopping 9.8 per cent this year, say numbers released this week by the Australian Bureau of Statistics, which showed national price growth was 4.7 per cent between the   March and   June quarters. 
Morgan Stanley has said the prices have peaked, but Saxo Capital Markets Asia macro strategist Kay Van-Petersen says they will continue to grind upwards and the government is unlikely to do anything about the skyrocketing prices.
"The government has to try and talk it down and say it's inflated, but at the same time all they can try and do is control the ongoing growth as best they can," Mr Van-Petersen said. "If they wanted to prick it, they could, but Australia simply cannot afford to."
New Zealand and Singapore have enacted strong policies to force adjustments in housing markets and Mr Van-Petersen said Australia could easily deflate the bubble by pulling the stamp duty tax charged to foreign buyers from properties of more than $15 million to, say, $1.5 million.
But the property market is one of the few areas of the economy that is growing adequately as terms of trade plummet and mining companies shed value because commodity prices are falling in light of a slowing China.
"Australia can't afford for property to have a hard landing. If housing prices bust, the banks will get hit hard. And then what is there? It's in everyone's interests right now."
Even the International Monetary Fund is talking about Australia's favourite conversation topic: property prices and whether the country is in a bubble.
In the IMF's latest report on the Australian economy, it raised the increasingly likely potential of a housing price correction, and called for greater investment in infrastructure to "relieve bottle necks and housing supply constraints".
"Buoyant housing investor lending has recently prompted regulatory action to reinforce sound residential mortgage lending practices," its report said.
In a similar finding to that of the Australian Prudential Regulation Authority, the report said the big banks' strength and profitability would need more support if a severe adverse scenario occurred, such as a housing bubble collapse.
"To address risks in the housing market, directors supported targeted action by the regulator. They cautioned that if investor lending and house price inflation do not slow appreciably, these policies may need to be intensified."
Even if more houses and apartments are made available for purchase, Mr Van-Petersen warned any political or financial issues in China could trigger a huge wave of foreign buyers into the property market.
He said: "There is a lot of talk about Chinese money, but you guys haven't seen anything yet. Any wobble in China, whether it's political or a financial markets issue, will see serious money flooding out here and, so far, Australia's got no idea of what that looks like."