Interest rates will be cut (eventually). Will it really send property values sky high?
There's no doubt interest rates affect the property market, but how it looks each cycle can vary.
Michele Bullock doesn’t want to talk about property prices.
More specifically, when Capital Brief asked the Reserve Bank governor what might happen to the nation’s housing market when the central bank eventually cuts rates — she brushed it off.
“I wouldn’t like to predict housing prices, frankly. Every time we try to do that we seem to get it wrong,” she said, in response to our question at a press conference after the March monetary policy meeting.
She conceded that when interest rates rise, the amount people can borrow declines. And when rates go down, the opposite occurs. “It’s true that that effect is there,” she said.
“The bottom line with housing prices, though, is that it’s really about supply and demand.”
