9
Each rate rise locks tens of thousands out of home ownership, research finds (www.abc.net.au)
submitted 1 month ago by to c/ausfinance@aussie.zone
12 comments fedilink hide all child comments
 

In short:

A rate rise is estimated to cause an immediate 5 per cent reduction in home purchases.

Economic modelling suggests the home ownership rate would fall by 0.3 of a percentage point and take more than a decade to recover.

What's next?

Markets and economists are almost certain the RBA will announce a rate rise on Tuesday.

you are viewing a single comment's thread
view the rest of the comments
[–] 1 point 1 month ago (4 children)

Main problem is energy prices are the cause of inflation atm and increasing interest rates isn't improving the situation, and the fed have no other real options

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 4 child comments
    •
  • [–] 1 point 1 month ago (1 child)

    the source of inflation isn’t all that relevant in terms of interest rates though… they aren’t going to solve the problem (rate changes never do) but they cool the rest of the economy in aggregate and cut off wage-price spirals

    it doesn’t really matter if you’re paying 20% of your wage in energy bills if the remaining 80% still allows you to buy whatever you want. inflation only comes down when discretionary spending slows

    rate hikes don’t target inelastoc spending like food and energy; they target things like home and car purchases which reduces the amount of cash sloshing around

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 1 point 2 weeks ago

    inflation only comes down when discretionary spending slows

    exactly and we're still not seeing cuts to discretionary spending ... yet, just lots of complaining though :) It was expected to and hence the stock prices of discretionary spending business like JB HiFi etal took a hit but new car sales are up, travel is up etc

    I'm not one to lecture though... we just spent 7 months travelling Asia and we have zero debt (own a very modest cottage in a small rural village) , an ecar charged from solar for free, electricity itself is free (FIT from solar and away for months lets the credit build) as much free beef as we can eat, (farmer agists his cows on my back paddock and pays me with beef and some $) a gf who is a part time chef and loves to veg garden and cook superb meals, fruit trees out the ying yang and my interests and activities when back in Aus. are mostly free (hiking, MTB riding, kayaking, fishing, veg. gardening, the library I can walk to is free etc). Currently life is very good.

  • permalink
  • fedilink
  • source
  • parent