Standby for RBA jawboning on overheated Sydney and Melbourne auction markets

The rampant winter Sydney and Melbourne residential auction markets will trigger the RBA Governor to return to jawboning. 

The bubble popper-in-chief Glenn Stevens will wisely be taking whatever opportunity to douse these red hot property markets with a strengthening of the language around the market's intensity.

Especially surrounding the Sydney growth, which while much of it catch-up, is looking overly exuberant in today's RBA chart pack.

Without success the RBA will find itself in the circumstance where they will need to raise rates when most the the country's business and property markets aren't resilient enough to cope.

As Westpac's Andrew Hanlan put it the record low interest rates are a key tailwind for growth, especially housing, but the economy remains constrained by a number of headwinds.

Of course jawboning hasn't worked with the RBA's efforts to get a lower dollar so what chance the bank can assist in having house prices avoid reaching bubble territory?

First home buyers aren't big participators in the current market, so the RBA's aim will be family home upgraders with record low mortgage funding and the ever emerging mature SMSF property investors.

Repeated references to the history of house prices that fall as well as rise will be the RBA's message.

I am old enough to remember the last recession - with property crash - in the early 1990s, but subsequent generations aren't.

There are still plenty of buyers who got caught in the 2003/2004 hype - and some of these buyers that are still underwater.

Since then there have been a series of dips, the biggest after the global financial crisis.

And then another small dip in 2010.

Only last weekend it was evident that the Australian cricket captain Michael Clarke had seemingly been over-exuberant in his 2006 Lilli Pilli purchase, as it failed to sell on its second subsequent auction campaign.

Yes mostly in regional Queensland and Tasmania, but even in the seemingly recovering strong markets, the 2014 March quarter RP Data Pain Gain reports plenty of loss taking. They put loss taking at a 7% across the country.

But the prospect of over paying can too often be overlooked in the herd-like emotional auction mentality that is standard Saturday fare for home buyers. And where else do diversifying investors go for the potential gains and income that property promises with extraordinary tax benefits?

There's no reckless rush to credit showing up in the RBA house finances chart and interest paid is demonstrably dipping in these unusual times.

Do the punters listen anymore?