Housing claims prominent role in policy’s pain threshold
The implied cash rate for mid-2023 suggests mortgages will be above 6 per cent by mid-next year. It’s difficult to envisage the RBA bowing to the bond market.
Central banks lifting their cash rates to tackle the highest inflation in decades have increased mortgage borrowing costs around the world.
House prices are responding to tighter financial conditions. New Zealand house prices are 11 per cent off their highs, Canada 3.5 per cent, Germany 3.6 per cent and Australia 3.9 per cent.
