House prices projected to jump 30% in three years: RBA
20 January 2021
It’s the document that was never meant to see the light of day. But a Freedom of Information request reveals the Reserve Bank of Australia projects a 30% increase in house prices if interest rates remain low for the next few years. The internal, not-meant-for-public-viewing analysis by the RBA looks at the impact of low interest rates on asset prices, including property. The November 2020 document projects that housing prices could increase by 30% after about three years, so long as the official cash rate remains near record low levels (at or below 0.5%). And that part of the equation looks promising, as the RBA board said they "weren't expecting to increase the cash rate for at least three years” when they cut it to 0.1% in November.