A chasm is widening in Australia between those who believe we’re in the midst of a property bubble and those who make money from propping up the boom.

One of the latest to deny houses are overpriced is former Queensland premier Anna Bligh, the new CEO of the Australian Bankers’ Association.

Asked by the ABC’s Leigh Sales on Monday night if the banks believe in the bubble, Ms Bligh replied: “That’s certainly not what I’m hearing, Leigh, but that doesn’t mean people aren’t keeping a very close eye on what’s happening and being very prudent.”

Then there are the bank CEOs themselves. At the recent parliamentary hearings, they all to a man refused to use the B-word.

Prime Minister Malcolm Turnbull, a large property holder, and Treasurer Scott Morrison, former national policy and head of research at the Property Council of Australia, are also resistant to the ‘overpriced’ theory.

Mr Morrison’s former employer, the Property Council, has gone so far as to dismiss bubble talk as “hot air“.

That was echoed last year by billionaire property developer Harry Triguboff, who said, “There’s no housing bubble, I promise you”.

There’s an unmistakeable trend: many of the most vocal anti-bubblers have vested interests in price growth. The Liberal Party needs the votes and donations of property owners and investors. The banks make huge profits from mortgage lending. And property developers, well, it’s in the job title.

The bubble argument boils down to whether you think prices in Sydney and Melbourne have ballooned so high they risk a catastrophic price correction.

Bubble believers were heartened by CoreLogic’s latest figures, which put capital city price growth at a seven-year high.

The key arguments were summarised this week by economist Dr Timo Henckel in The Conversation: “Double digit increases in house prices, combined with unprecedentedly high household debt (more than 120 per cent of GDP, the third highest in the world) and household debt servicing ratios (also the third highest in the world)”.

He joins former Liberal leader Dr John Hewson, also an economist, who recently told The New Daily a price “bubble” is putting housing “out of reach of so many”. He blamed the bubble on “favourable tax concessions” for domestic investors and demand from foreigners and self-managed super funds.

David Murray, former Commonwealth Bank CEO and author of the influential Murray Review, has said “all the signs of a bubble are there”.

Two years ago, when prices were much lower, ASIC boss Greg Medcraft said he feared Sydney and Melbourne were already in a bubble. In March, he said, “I’ve been saying for a while I thought it was a bubble, other people are catching up now.”

Treasury secretary John Fraser also said two years ago that parts of Sydney and Melbourne were “unequivocally” in a bubble.

Wayne Byres, chairman of financial regulator APRA, is somewhere in the middle. He refuses to “use the B word” because it over-simplifies the issue. But he did warn that the banks are lending in “an environment of heightened risk”.

Much of the overseas finance press has cried “Bubble!”, including The Economist, which says Australian property prices are at least 40 per cent overvalued.

What everyone agrees on is that a crash would be devastating. The impact on unemployment alone would be catastrophic, and it would strike when the global economy is only just starting to recover from the last crisis – coincidentally, caused by US sub-prime mortgages.

Many triggers for a collapse have been posited by the bubble side, including a Reserve Bank rate rise, skyrocketing unemployment, cuts to immigration, an oversupply of apartments, another global crisis, regulatory intervention, or the loss of Australia’s AAA credit rating.

Maybe prices will simply get so unaffordable that people will stop buying, forcing a price reversal. Or maybe talking about a bubble will be enough to spook the market. So the bubblers say.

There is less agreement on whether this destruction might also have a cleansing effect. That seems to be what many bubblers believe: that it’s the ‘crash we need to have’.