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Bill's avatar

Is doing anything that reduces house prices really such electoral poison? Don't parents realise that higher houses prices mean their children are less likely to leave home, or will need to draw more from the bank of Mum and Dad, or will need to move far away to afford a home, taking the grandkids with them?

Maybe the smarter ones even understand that housing wealth is an illusion. Your house goes up in price but so does the price of your next house

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George Wilson's avatar

“The asset price of housing doesn’t reflect the price of occupying housing—it mostly reflects prevailing interest rates.” Your words Cameron.

Thanks for a great article, I hope you are still checking the comments.

Two questions about the above statement:

1) What has been the relationship between rates and house prices over (say) the last 30 years in Au and NZ.

2) Australia and NZ have the highest house price to income ratio in the OECD, ( only Honk Kong is higher!). At a guess, our rates are higher on average than others, e.g. Germany, France, even UK. What is the main driver of Antipodean out performance ? It certainly isn’t a shortage of land!

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