'Housing bubble'. The words leaped out of the Treasury Secretary's mouth and onto the front pages this week.
And there is no doubt about the heat in the Sydney market in particular, and to a lesser extent in Melbourne. Recent house price growth in those cities isn't sustainable and most commentators see this easing over the year ahead.
It is absolutely appropriate for regulators to be monitoring the situation closely and working with the banks to ensure that risks are properly managed, as they are doing.
But it is worth remembering two things amongst the bubble talk. First, Sydney isn't the whole country. House price growth has varied considerably across the capitals over the past year with growth decidedly modest in Brisbane (3.1%), Adelaide (3.4%), Canberra (2.4%) and Perth (0.7%) while Hobart and Darwin recorded falls in average dwelling values of -1.0% and -2.0% respectively, according to CoreLogic RP Data.
Second, it's a salutary reminder of the importance of securing healthy long term housing supply pipelines, something Sydney failed to do for a decade. Let's remember that Sydney was building fewer houses than Adelaide for a period.
This sustained undersupply of housing was always going to be house price inflationary when the NSW economy finally woke up from its slumber.
Fix housing supply constraints. It's something we'll have more to say about tomorrow when we release a major new report card on the country's development assessment systems. And a warning, the report card isn't pretty reading.