Home buyers bullish despite Reserve Bank rate hikes


It is hard to believe that Australian home values have risen 10.2% across the five major capitals since bottoming in late January:

This rebound has occurred despite 1.25% of rate hikes by the Reserve Bank of Australia, which would normally have sent prices lower.

Westpac’s latest consumer sentiment survey also revealed that Australians remain fairly bullish on house prices into 2024, despite overall confidence remaining at recessionary levels:


“Consumers remain positive on the outlook for house prices”, Westpac wrote.

“The Westpac Melbourne Institute House Price Expectations Index dipped only slightly, by 0.7% to 157.3”.

“Two thirds of consumers still expect prices to rise further over the next 12 months”.

A similar situation is playing out in New Zealand where home buyers are becoming more bullish despite expectations that interest rates will rise even further.

The latest ASB Housing Confidence survey shows that “for the first time in eighteen months, more New Zealanders expect house prices to increase than decrease”:

NZ house price expectations.

“There has been a steady reduction in the net balance of Kiwis expecting further house price falls over recent surveys”.

“With recent data generally showing prices no longer falling, Kiwis tend to think the housing market has reached a turning point”, ASB writes.

A net 28% of kiwis also expect the Reserve Bank to raise interest rates; although that is down sharply from earlier in the year:

NZ interest rate expectations

I put the bullishness on house prices in both nations down to record immigration.

Australia’s net overseas migration (NOM) hit an all-time high 518,000 in 2022-23:

Australian NOM

New Zealand’s NOM has also surged to a record high of nearly 120,000:


This record NOM has fire-hosed demand and raised concerns about housing shortages, driving fear-of-missing out (FOMO) and raising price expectations.

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.