Governments and banks are being urged by a senior Reserve Bank of Australia official not to ignore signs of a boom in the commercial property sector.
Dr Luci Ellis, the RBA's financial stability head, says the property market is not just about household mortgages and that policymakers and risk managers need to pay attention to commercial property loans.
"It is these segments of lending that tend to grow in importance in the late stages of a boom, and to account for a disproportionate share of loan losses in a bust," she told the AGSM Real Estate Symposium on Tuesday.
"And, if we are looking for surges in credit growth as precursors to painful downturns, we should bear in mind that, historically, these surges have been evident in business credit far more than in housing credit."
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