While much of the world grapples with a housing slump, Australian policymakers are starting to worry about the opposite problem: A housing bubble.

Fueling concerns are a lack of supply of new housing in Australia, along with interest rates at their lowest levels since the early 1960s, encouraging homebuyers to invest.

At the same time, evidence is mounting that Australia's economy will sidestep a recession, with recent indicators pointing to an acceleration in economic activity, boosting buyers' confidence.

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