The numbers are clear - if Sydney's apartment prices were to dip much below $550,000, construction will quickly dry up, even with today's lower financing costs.
In short, projects would not be sufficiently profitable for developers to build and there would be no adequate return on investment.
Indeed, RBA Governor Glenn Stevens confirmed as much in a speech this morning.
The previous annualised record was recorded in 1994 after the cash rate had been slashed from the nosebleed level of 17.5% to just 4.75%, resulting in higher prices and and a construction boom (click chart):
In fact, apartment approvals are booming to new record highs (click chart):
No signs of any constipated supply response there, rather the market just seems to be doing exactly what it should do, and the dwelling construction boom remains - albeit tentatively - still on track.
Acquirers of property, particularly buyers of units and apartments, must be wary of pockets of oversupply.