Falling interest rates are no gift to younger generations (redux)

Advertisement

By Leith van Onselen

Last week I posted a detailed analysis debunking the view that falling interest rates are a “gift” to Australia’s younger generations because they make housing “more affordable”.

Yesterday afternoon, The AFR’s Jonathan Shapiro published an alternative analysis using bond maths that comes to a similar conclusion: that cratering interest rates have made housing more expensive for younger generations, while also capping returns to future buyers:

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.