The Great Housing Debate has taken place between Coolabah Capital’s Chris Joye and economist Stephen Koukoulas (‘The Kouk’).
Taking the “bull” side was the Kouk, who basically argued that interest rate hikes are not a key driver of house price falls, and forecast that Australian house prices will only decline 7% peak-to-trough before commencing a new boom.
Chris Joye took the “bear” side and argued that interest rates are the single biggest determinant of purchasing power in the short-term and, therefore, the RBA’s aggressive monetary tightening will deliver a major house price correction. Moreover, the factors that Kouk cites (i.e. population growth, housing shortages, etc) are longer-term drivers of affordability and, therefore, won’t have much impact in the near term.
