Matusik has plotted the 48 interest rate cuts the RBA has made since 1990 and observed that house price rises inevitably follow.That leads him to conclude we’re on the verge of a growth spurt.
“I believe that the Australian housing market has now entered a ‘sweet spot’, helped by lower interest rates, easier access to credit and government stimulus,” he writes in the Matusik Missive.
“I also think this will last for about a year, maybe a bit longer, after which the longer term, and larger, trends will start to exert their influence.”
So are we talking a 1 per cent growth spurt, 5 per cent or more?
“Most housing prices should increase,” he writes. “By how much is a fool’s errand.”
No crystal ball is that accurate it seems!
For those who love their trivia you might be interested to learn that in April 1990 the interest rate was a whopping 15.5 per cent.
At the start of this month the RBA cut the official cash rate to a record low of 0.1 per cent.
This means cheap home loans – so make sure you shop around.