That’s what UBS regional chief investment officer Asia Pacific Kelvin Tay reckons:
“Chinese buyers won’t be deterred by marginally higher interest rates. They are buying properties with mostly cash. Australia has had a spate of robust capital city housing data in recent months, but Chinese buyers have been pushing prices up. Rate hikes will now be an ineffective tool to push down property prices and that is why UBS does not think the RBA should do it. Australia should follow the lead of jurisdictions like Hong Kong that have successfully introduced tax reforms that target people who buy and sell investment properties,” Mr Tay said.
Without putting too fine a point on it, this is tripe. If the RBA raised rates local demand would dry up and the dollar would rocket. That would make prices less attractive for offshore investors on two fronts. If anything, rate rises are made more effective by foreign money.
Same on the downside because there is likely to be more support for the market as the falling dollar makes prices more tempting.
