From our Chris today:
When the RBA slashed its cash rate from 4.75 per cent to 1.5 per cent between 2011 and 2016, it repeatedly argued that this would not trigger a re-leveraging of household balance-sheets and/or a new double-digit house price boom, which is exactly what happened.
…Most embarrassingly for the RBA, two of its top researchers, Trent Saunders and Peter Tulip, published a detailed academic paper shortly thereafter proving that almost all of the stunning increase in house prices between 2013 and 2017 was indeed attributable to the reduction in mortgage rates.
