RBA's Philip Lowe explains Sydney, Melbourne's 'superstar' house prices

Reserve Bank of Australia governor Philip Lowe has lent credence to the rise of the "superstar" city, a phenomenon Sydney and Melbourne are both part of, and which appears to rationalise high house prices beyond the effect of low interest rates.

Following Dr Lowe's address to the Australian Business Economists in Sydney on Tuesday, where he reiterated "there is not a case for a near-term adjustment in monetary policy" despite being more upbeat on the outlook for business investment, the governor was asked his opinion on the housing market.