What History Tells Us About Interest Rates & Property Prices


Between 2002 and 2008 the Reserve Bank of Australia increased interest rates 22 times.

During this 6-year period, house prices in every capital city in Australia (outside of Sydney and Melbourne) doubled in value.

I hope this video helps you see past some of the short-term noise relating to the interest rates, especially with the Reserve Bank of Australia saying to the major banks that they are only raising interest rates at the moment to slow down inflation, and once they have done this they will begin cutting the interest rate again from mid to late 2023.

Simon and I recently took a look into the relationship between rising (and falling) interest rates and property prices over the last 30 years.

What we found, after looking at data from CBA, Core Logic, Simon Pressley and Ryan from On Property, was that there is a strong relationship between interest rate cuts and property price gains.

I was also expecting to find the opposite to be true, a strong relationship between higher interest rates and property price declines. but this was much harder to find especially when you overlay Fred Harrison and Phil Andersons 18.6 year real estate cycles.


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The Listener, Reader or Viewer acknowledges and agrees that:
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About

Ben founded Pumped On Property after building a multi-million dollar property portfolio over a 5 year period. His mission is to show you how to replace your income through property investing so you can do what you love…full time.

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