Anybody concerned that incoming Reserve Bank of Australia (RBA) governor Michele Bullock will continue to tighten monetary policy when her term begins in October should take comfort in the fact that she is financially incentivised not to do so.
As reported in News.com.au, Michele Bullock has a $6 million property portfolio and four investment properties.
In addition to a $3 million owner-occupier home, Bullock owns two apartments at Five Dock and Drummoyne in Sydney that are worth around $1 million each and rented out for around $600 a week.
“Two other apartments were purchased in Russell Lea in 2007 for around $500,000 and have subsequently doubled in value”, notes the article.
While I am obviously being facetious suggesting that Bullock would deliberately cut interest rates to inflate her own property wealth, the fact that she is so heavily invested in the most interest-rate sensitive asset class is a bad look for somebody about to take the reins on monetary policy.
That said, the same insult can be levelled at many of Australia’s politicians who own extensive property portfolios and then implement policies that pump-prime values.
The powers that set housing and interest rate policy in Australia tend to be heavily invested in property.
Like it or not, it is the Australian way to get rich from property.
It is also why nothing substantive will change on the housing policy front. Financial interests do not align.
