Alas, there are many more housing “can kicks” possible

Domain continues its laudable series bashing the RBA today. It has good sources, especially our favourite, Gareth Aird at CBA, but, alas, I have to disagree with its conclusion that Australia has delivered its last “kick of the can” to house prices:

  • The RBA does care about house prices (mostly true).
  • Financial liberalisation is the key driver of the boom.
  • Gareth Aird says at zero rates the game is over.

The game might be over but it will be a political decision if so, not economic nor monetary.

There is nothing to stop the RBA from lowering Australian mortgage rates further. There will be prices to pay for it doing so. But it is quite possible.

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