The housing bubble continues to inflate in earnest, as the last major weekend of the auction season delivered a spate of booming prices. Almost $1 billion worth of residential property changed hands on Saturday in Melbourne alone.

While property bulls continue to blame a shortage of supply for the price rises, some of the recent increases belay any sort of "supply based" explanation. The Sunday Age reported yesterday that a one-bedroom property in Malvern East sold for $374,000 yesterday. It sold for $221,000 one year earlier, and the vendors spent $30,000 improving the property. In one year, the price effectively rose by 50%. Another Melbourne bayside property was reported as selling for $600,000 -- an increase of 27% in 18 months.