Changes in interest rates are the primary driver behind the movement in house prices and not supply and demand, according to a Reserve Bank paper that appears to contradict the bank's governor.
The most significant driver behind house prices and the level of construction was interest rates, says an analysis, A Model of the Australian Housing Market, by RBA analysts Trent Saunders and Peter Tulip.
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Matthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter.
