Facing fat home loan jumps

Personal Finance

A much larger rise in inflation, especially tradable inflation, has turbocharged wholesale swap rates with more in prospect, signaling giant mortgage rates are ahead

18th Oct 21, 6:20pm by David Chaston

Image sourced from Shutterstock.com

Today (Monday) we have had some unprecedented rises in key swap rates. They have been driven by an unexpectedly large rise in the CPI.

The one year wholesale swap rate rose +23 basis points. The two year wholesale swap rate rose +28 bps.

These are the largest one-day rises since we started tracking wholesale swap rates in 2007.

The one year rate is suddenly back to levels last seen in June 2019. The two year rate is now back to levels last seen in January 2019.

If they hold, these huge jumps will have major implications for fixed mortgage rates.

What they indicate is that the money markets have priced in an extra full +25 bps rise at the next RBNZ OCR review on Wednesday, November 24, 2021. This is on top of what they had priced in for the expected strong CPI rise.

And these rises come at the same time international benchmark rates are rising too.

The future is one of sharply higher costs of money. And that means sharply higher mortgage rates.

To give an indication of what might be on the cards, here is what one year fixed home loan rates were when wholesale rates were last at this level:

	Jun-2019	Oct-2021	difference
1 year fixed mortgage rates when swap rates were last at 1.46%
	%	%	bps
ANZ	3.89	2.79	110
ASB	3.95	2.99	96
BNZ	3.89	2.99	90
Kiwibank	3.85	2.95	90
Westpac	3.89	2.99	90

One year fixed rates could conceivably rise almost a full +1.00% in the next few weeks.

And here is what they were for two year fixed home loan rates:

	Jan-2019	Oct-2021	difference
2 year fixed mortgage rates when swap rates were last at 1.93%
	%	%	bps
ANZ	4.29	3.25	104
ASB	4.29	3.45	84
BNZ	4.29	3.45	84
Kiwibank	3.99	3.30	69
Westpac	4.29	3.45	84

Two year swap rates could conceivably rise by more than +0.80%.

But things are likely to be 'worse' than this. The earlier benchmark rates we are using to compare are from when rates generally were falling and expected to fall further. Now the shoe is on the other foot - background rates are rising and are expected to rise further.

There is some way to play out here. But borrowers wouldn't be wrong to assume future rates will be substantially higher than today's rates.

And a key reason is that our CPI is now being driven by tradeable inflation (imported inflation). This too is very unusual, and that influence hasn't been around for many decades.

Daily swap rates

Select chart tabs

Source: NZFMA

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104 Comments

by morepork | 18th Oct 21, 6:33pm 1634535183

Even if they go up that much, home loan rates would still be negative in real terms

by J.C. | 18th Oct 21, 6:50pm 1634536210

Cut out a few cafe visits and she'll be right ya reckon? Problem is that it's circular. Stop spending into the consumer economy and revenues, margins, and profits fall. Think of it like a doom loop.

by ikimpaul | 18th Oct 21, 9:15pm 1634544940

or the other words commonly used is the recessionary spiral - its now a balance a very very delicate balance

its also why most countries (ie Australia) tighten lending standards before the housing bubble balloons to something like 30%-40%.

NZ cant say it wasnt warned - IMF and the ratings agencies all raised red flags back in Feb and March

by Carlos67 | 18th Oct 21, 8:03pm 1634540582

The only thing going negative in real terms is your salary.

by Bugger | 19th Oct 21, 8:52am 1634586776

In other words stagflation. Price inflation with low productivity (equating to zero wage increases).

by Colin Nemo | 18th Oct 21, 9:44pm 1634546679

Few people understand this.

by Sluggy | 19th Oct 21, 8:17am 1634584633

Does the average Joe get paid in real terms ? Still need to service the debt.

by morepork | 19th Oct 21, 9:13am 1634588039

If you're not getting at least CPI increases in pay, now is the time to find a new employer

by Sluggy | 19th Oct 21, 10:06am 1634591164

I am an employer, not sure how cpi increases work with a million dollar auckland life sentence ?

by Whatwillhappen | 19th Oct 21, 11:36am 1634596610

Yep. Just started a new job - 35% pay increase. Deliberately priced in 3 years worth of foregone CPI pay increases. If you have marketable skills, jumping is the only real way to stay stable

by frazz | 18th Oct 21, 6:46pm 1634536007

Glad I went for 2.99 for 4 years...

by printer8 | 18th Oct 21, 8:04pm 1634540657

Good call frazz.

Interesting, last April I was calling the BNZ five year 2.99% rate as being prudent based on bank economist comments (you know the ones involved in deterring rates). Quiet a number of this site rubbished it as they knew better - some should be eating their words.

Any comment flyer and dumbandbroke?

by Mrs The Point | 18th Oct 21, 8:36pm 1634542585

Yep, you are a legend, in your own mind.

by Yvil | 20th Oct 21, 12:00pm 1634684432

Why the jealousy?

by HouseMouse | 18th Oct 21, 8:42pm 1634542937

Just wait until the domestic economy tanks by the middle of next year.

by frazz | 18th Oct 21, 9:25pm 1634545516

I have always seen the NZ house market as pump it up...get the last and least able to afford interest rates rises lumbered with big mortages, then pull the rug. Rinse and repeat. The bank never loses.

by RCD | 18th Oct 21, 11:08pm 1634551737

Real estate agents are in for another bumper year, re-selling the properties they sold last year

by youngdumbandbroke | 19th Oct 21, 8:30am 1634585421

I'll bite. I've always maintained that rates will go up and validated that by fixing my loan to 3 years end of July. Your frail boomer mind deceives you again

by Nzdan | 19th Oct 21, 9:39am 1634589595

Likewise, as soon as I was up for refinance went 3.05% for 4 years and increased payments to a 9 year schedule.

by Halfway To Paradise | 19th Oct 21, 10:13am 1634591582

Glad I went 5 years at 2.99% I think I will be considering longer terms on mortgages I have for renewal in next 6 months. I think the inflation monster is loose, it is going to take quite a few years to get it back under control.

by Solve_it | 19th Oct 21, 9:45pm 1634633130

I locked in 3.09% for 5 years. 5 year term.

by waymad | 18th Oct 21, 6:57pm 1634536624

T'will be Interesting to observe the effects on house prices, affordability, and investor/FHB mix.

And let's not forget commercial/business financing rates, which are an input to most consumer prices.....

Coupled with inflating import costs - both goods and transport - inventory replenishment via working capital, financed via OD or secured loans, will become a tightrope to walk for many.

by tothepoint | 18th Oct 21, 7:11pm 1634537487

Hope the used car market is holding up ok…….

Might have to sell the wife’s Bentley.

TTP

by Independent_Observer | 18th Oct 21, 7:32pm 1634538742

What an injustice

by J.C. | 18th Oct 21, 8:47pm 1634543277

Will you accept Dogecoin or the digital yuan?

by Brock Landers | 18th Oct 21, 9:30pm 1634545829

Much wow.

by chebbo | 18th Oct 21, 6:59pm 1634536797

Slowly, then all at once.

by Brock Landers | 18th Oct 21, 7:25pm 1634538348

When mortgage rates hit 5% next year, that 1M mortgage on a fibro-shack or shoddy terrace-box in some ghastly corner of Auckland is going to require just under thousand dollars a week of dead money just to service the interest costs alone.

Then add rates, insurance, body corporate fees, maintenance, principal repayments, all while the cost of groceries, petrol and everything else is going through the roof and a flood of townhouses is hitting the market.

There are some very interesting times ahead, the astute investor would be determining if today's valuations make any sense whatsoever in that world and especially so when slumlords are no longer able to deduct interest costs from their tax bill.

There is a buyer's market coming... it's just a matter of time.

by Averageman | 20th Oct 21, 6:28pm 1634707689

Indeed. Leverage is bidirectional. Speculand just cant recall when that was.

by LFCYNWA | 19th Oct 21, 10:52am 1634593972

Per Warren Buffett the three easiest ways to lose money are ladies liquor and leverage!

by Halfway To Paradise | 19th Oct 21, 11:01pm 1634637717

They call compound interest the eighth wonder of the world, I suggest leverage is the ninth wonder of the world.

by DTRH | 18th Oct 21, 8:37pm 1634542652

I have been saying interest rates will raise as inflation hits I thought you said something like government would no let this happen lol have you changed your view brock

by HouseMouse | 18th Oct 21, 8:44pm 1634543062

Agree with the overall sentiment, but 1M mortgage is an exaggeration, more like a 700K mortgage for a crappy shoebox in a less than average location

by Brock Landers | 18th Oct 21, 9:36pm 1634546175

The insufferable people at Fletcher Living emailed me a "great deal" for one of their non-luxury 4 bedroom terraces backing onto the railway tracks in Swanson for the bargain price of 1.25M today.

A one million mortgage is not an exaggeration.

by HouseMouse | 18th Oct 21, 9:40pm 1634546453

OK, fair enough, but many of the crappy 2 bedroom shoeboxes are going for circa 750-800K, in West Auckland, South Auckland. That was what I was talking about.

Having said that, I saw Fletchers advertising a 2 beddie in Glen Innes of all places for circa 900K the other day....madness

by swingtrader | 19th Oct 21, 11:49am 1634597397

There are studio apartments selling for $500k down the bottom of Mt Eden Rd. I decided there wasn’t much more room for the market to lose the plot than that.

by Colin Nemo | 18th Oct 21, 9:54pm 1634547282

What a bargain!!!

If you really put your mind to it and think about it, for the luxury of owning a million dollar property, it's only obvious that you borrow a million dollars to get it.

If property doubles every 7-10 years, this property would be at least $2m - $2.5m by 2035.

by Notgreedykiwi | 19th Oct 21, 8:37am 1634585859

Do you know how many years needed to save 2mn dollars at a middle class salary of 100k a year?

by J.C. | 18th Oct 21, 8:49pm 1634543349

DGM maximus

by K.W. | 19th Oct 21, 11:41pm 1634640069

And then add in the non-deductibility of those interest costs that kick in for landlords this year, and you are going to have a significant cashflow crunch for a lot of people.

by Averageman | 20th Oct 21, 6:35pm 1634708126

Indeed. This will be the difference maker. Many that just focused on debt to kill tax have leveraged up at the ultra low rates to chase their income. Now they are about to process significant negative cashflow...

Popcorn.

by Squishy | 18th Oct 21, 7:20pm 1634538001

It's not unreasonable, inflation is getting way out of hand and far above RBNZs upper threshold. If they let this go on it'll be too difficult to break the cycle. My guess is they raise 25bps at all of the next few meetings, inflation only being measures quarterly they just need to keep signalling they are prepared to get a handle on the controls.

by powerdownkiwi | 18th Oct 21, 9:35pm 1634546110

This inflation is being driven by planetary scarcity - and exponential growth hitting those limits exponentially rapidly.

Can't be fixed by interest-rate rises.

That can only hasten the crash.

Physics - trumped belief in the end. What a surprise.

by rollo19 | 19th Oct 21, 2:02am 1634562156

consumption ~20% above pre pandemic levels resulting in supply side constraints being hit - why? central banks plus gov stimi - they knew this would happen. Mopping up the rediculous amounts of free money in circulation requires higher rates for one

by nymad | 19th Oct 21, 8:28am 1634585330

Bahaha.

Imagine thinking this and trying to pass yourself off as an expert in resource allocation. ]

What we are seeing is not the result of some planetary limits, PDK. It's the result of loose monetary conditions and a huge negative supply shock.

by linklater01 | 19th Oct 21, 3:49pm 1634611794

pdk,

As you know, i am broadly on the same page as you but must question this; "This inflation is being driven by planetary scarcity"-. of what?

Petrol prices are rising, but not because oil is scarce. It will become scarce but not yet.

by powerdownkiwi | 19th Oct 21, 5:07pm 1634616446

Watch the Northern Hemisphere this winter.

Global EROEI is too low, and even at these fuel prices, not many 'next' options open up.

Atop that, global debt is too high and unrepayable, and everything depends on fossil energy, so EVERYTHING is going to get 'more expensive'. To people who have never carried as much debt already already.....

Politicians will hide the truth; economists will help them do that (bit like old-school priests backing pie-in-the-sky-when-you-die) but this is inexorable now.

by hemihua | 21st Oct 21, 1:45pm 1634777120

Just as well the government will force councils to allow us to build 3x3 story infills. Triple population here we come! What could possibly go wrong? I can see them drooling over the immigration lever already.

by CWBW | 18th Oct 21, 7:33pm 1634538819

On the positive side, this may be a good reason for companies cancel any proposed wage increments for the upcoming year.

It's only prudent for businesses to be conservative with a rise in the cost of financing and economic uncertainty.

by Brock Landers | 18th Oct 21, 7:45pm 1634539558

Astute companies know that the costs and risks of recruiting and training new employees is vastly more expensive than the cost of retaining existing ones.

by CWBW | 18th Oct 21, 7:48pm 1634539732

The cost of retaining low utility 'experienced' employees usually costs more during periods of market contraction and rehiring only at market expansion actually comes with an additional benefit of revitalising company culture and its operations.

by Brock Landers | 18th Oct 21, 9:38pm 1634546294

It won't be the low utility ones leaving for greener pastures.

by Pragmatist | 19th Oct 21, 2:38pm 1634607528

It is amusing how everybody above the factory floor thinks they are indispensible.. until they they get restructured out of a job.

by powerdownkiwi | 18th Oct 21, 9:37pm 1634546250

CWBW - how do you sleep?

I appreciate there are folk that crass, but publicly?

by CWBW | 18th Oct 21, 9:55pm 1634547317

That's easy; by not being a hypocrite and do it first before someone does it to you.

by Independent_Observer | 19th Oct 21, 11:08am 1634594935

So opposite of the golden rule? Do to others that you do not want done to you (but just do it first...)

Imagine the hell we'd find ourselves in if everyone was to see society through that paradigm.

by Colmolo | 18th Oct 21, 7:41pm 1634539272

Don't worry everyone, aunty Cindy will keep this sh*t show spinning into the stratosphere

by Mr Frank | 18th Oct 21, 7:49pm 1634539776

Who cares.

KPIs are overrated - Ardern.

Rates can go up as much as they want - we have nowhere to splash the money anyway.

by Albert2020 | 18th Oct 21, 8:35pm 1634542506

I thought banks were able to access the FLP at the current OCR or is this only for floating mortgage rates?

by Nifty1 | 18th Oct 21, 8:40pm 1634542844

Yeah, what's going to happen here - can't it be accessed by banks till 2022?

by WellingtonInvestor | 18th Oct 21, 8:48pm 1634543316

I can see why banks got rid of the 7 year term because they maybe very popular today to bank in a lower rate.

by ikimpaul | 18th Oct 21, 8:57pm 1634543876

this time last year a 12 month rate bottomed out at 2.29%. If they rise to 3.89% - which is only .8% on todays 2.99% then for a

500K loan - monthly repayments rise from $1921 to $2355 per month or $430 extra per month

750K loan - repayments rise from $2882 to $3533 or $655 extra per month

$1M loan - repayments rise from $3843 to $4711 or $865 extra per month

Thats a lot of money families need to come up with in an economy where fuel is at record prices, rates are up 5%-7% (roughly $30-50 more a month in most councils) food is up 5-10%.

the question is what luxury goes first - will it be dining out, holidays, new car.

by HouseMouse | 18th Oct 21, 9:04pm 1634544293

Even more pain for hospo and retail?

by Lord Dowding | 18th Oct 21, 10:09pm 1634548142

But you’ve ignored that salaries are also going up at the same rate if not more.

by ikimpaul | 18th Oct 21, 10:18pm 1634548705

maybe at your work - but not anywhere normal - you would need to have got a $7500 pay rise to manage the increases on a 500K mortgage - dont know many people who got that this year - Nurses, teachers, public servants certainly didnt.

by GV 27 | 19th Oct 21, 7:58am 1634583538

People also forget that inflation is measured retrospectively; your money is already worth less, and declining with each passing day.

If you aren't getting backdated pay increases, you're still losing.

by marewa | 18th Oct 21, 9:13pm 1634544838

It seems that the Bank of England are in the same bit of bother, with the FT reporting

"The governor of the Bank of England warned on Sunday that it “will have to act” to curb inflationary pressure, making no attempt to contradict financial market moves that have priced in the first interest rate increase before the end of the year."

Although I am hoping that we return to a wolrd where the value of something is the sum of it's future cashflows, I just feel for all those looking now at the whirlpool.

by Avocado | 18th Oct 21, 9:25pm 1634545521

We all know what the cure for high prices and higher interest rates is tho......high prices and high interest rates.

It will all fall over and the CBs will be back at it again. Lower rates and QE infinity.

by HouseMouse | 18th Oct 21, 9:29pm 1634545764

yep exactly.

The OCR will go negative at some point in the next 2-3 years.

by powerdownkiwi | 18th Oct 21, 9:39pm 1634546344

If indeed the tracking system remains intact.....

by Notgreedykiwi | 19th Oct 21, 8:40am 1634586028

And how will that help you?

OCR going negative means no one is spending money and is that good for this small nation which doesn't build anything of their own.?

by HouseMouse | 19th Oct 21, 9:11am 1634587912

I didn't say it was good...

by company of heroes | 19th Oct 21, 11:17am 1634595451

And before that, businesses will go bankrupt, people will lose their jobs, investors will be too scared to invest. It might be even worse than 2008 GFC.

by rastus1 | 18th Oct 21, 9:45pm 1634546732

So do we still think house prices always go up?

Or has this changed a few opinions?

Is the rush for the exist about to begin?

Can’t be long before the blinding obvious becomes blindingly obvious.

by HouseMouse | 18th Oct 21, 9:49pm 1634546949

I'd say there's a *little* more life left in the bubble, but not much.

by Sam B | 18th Oct 21, 9:59pm 1634547599

I wouldn't want to bet on it, but this might be the top.

Interest rate rises -- and more (probably) on the way -- no sign of inflation abating -- a lot of inventory coming online shortly... I think the market will be slightly queasy by the end of the year. Probably not down much in nominal terms, but looking a bit shaky at the knees...

by Whatwillhappen | 19th Oct 21, 11:47am 1634597247

For a laugh read Ashley Church's column today. The DGM's are still wrong he says. Still lots of life left

by Mr Ed | 19th Oct 21, 1:51pm 1634604703

is someone still publishing his unqualified dross ? Oh, that's right, its advertising.

by stuart786786 | 18th Oct 21, 10:02pm 1634547748

"A much larger rise in inflation, especially tradable inflation, has turbocharged wholesale swap rates with more in prospect, signaling giant mortgage rates are ahead"

Mr David, not to worry as Mr Orr is an expert and will find a way to support the ponzi.

Wait and Watch.

PS : How could Orr or Jacinda screw NZ economy = Housing Ponzi.

by Averageman | 20th Oct 21, 6:49pm 1634708972

Indeed. It's amazing to watch Labour protect Bank profit and speculative home owners while they further exploit Labours core voting group of low wage earners.

by Roy1 | 18th Oct 21, 10:52pm 1634550727

RBNZ run by Mr Orr stands exposed.

Will they now stop lying and manipulation ?

by AUS | 18th Oct 21, 11:17pm 1634552271

Question is do people refix their mortgage tomorrow for a longer term (if it makes sense), or do we think the economy will be stuck in a loop now. Too much debt to service high interest rates, consumer spending dries up and the RBNZ drops rates within 18 months.

Good luck predicting anything these days

by Roy1 | 18th Oct 21, 11:26pm 1634552763

Come what may Mr Orr can lay down his life to protect housing ponzi as has so much riding on it. So chill.

by DTRH | 18th Oct 21, 11:37pm 1634553453

Remember NZ is small fish in big pond and if NZD comes under pressure only way to protect it is to raise rates.20 years ago I would get 3.3 NZD for a pound now not even 2 inflation will get into double digits if they don’t

by Galloleous | 19th Oct 21, 1:06am 1634558787

Hey guys I whipped up a spread sheet to see what the best deal is depending on what you think the interest rates will be for the next 3 years. Makes some basic assumptions like paying the same amount of principle each year. But its quite interesting to see what the 1 year rates have to be for the 2 year term or a three year term to be the best option.

https://docs.google.com/spreadsheets/d/1xyN8stTcpPxEVEaXHKggCbC9onXw2bl…

Comments welcome, I am rather sleep deprived haha

by Matt73 | 19th Oct 21, 10:08am 1634591314

Great calculator, downloaded a copy thanks!

by mikekirk29 | 19th Oct 21, 8:07am 1634584050

1974-77 redux

With deflationary bust to follow

Saturn Uranus cycle of 45 years. Some may recall my describing this and being predictably mocked a few months ago. Last division was 1998. Still laughing are you!?

by Notgreedykiwi | 19th Oct 21, 8:43am 1634586199

You are right. It is funny how easy is it to manipulate people by media, then politicians, then real estate agents.

All make promises of rosy days coming in the future and everything will be alright.

There is an old saying, no pain no gain. So is the new world, did everything think that all the gains will be easy and there will me no pain?

by waymad | 19th Oct 21, 10:46am 1634593615

When the moon is in the seventh house

And Jupiter aligns with Mars

Then housing prices falter

Just hold on to yer Arse

by Carlos67 | 19th Oct 21, 1:16pm 1634602575

And kiss Uranus goodbye

by NZChinese | 19th Oct 21, 9:16am 1634588172

I reckon she will be fine as long as the immigration game continues. INZ recently announced 165k special residence visas.

by Notgreedykiwi | 19th Oct 21, 9:37am 1634589473

What will be fine?

I do not understand your logic. What is fine and good in your brain?

Nothing is going good on this economy right now. We are creating big deep craters for future generations. That is not fine or good in any sense.

It only looks good and fine for those having greedy goggles on them.

by NZChinese | 19th Oct 21, 10:17am 1634591842

""We are creating big deep craters for future generations"

Isn't it always the case?

The property market will be fine, as long as immigration continues. We run an immigration economy here in NZ.

by rastus1 | 19th Oct 21, 10:29am 1634592582

..so whats your end game? We all live in chicken coupes and squalor like many of the places our immigrants are escaping from?

You could always move to such greener pastures.

by NZChinese | 19th Oct 21, 10:38am 1634593123

I am just saying the fact. We constantly look for cheaper labour forces and additional capital via immigration to boost the economy. The property market is just part of it, Kiwis don't hesitate to cash in immigrants to achieve their personal objectives.

by rastus1 | 19th Oct 21, 10:42am 1634593341

It's a fact, but no unalterable. Yet you, like many seem to think it's a path we should follow. i say 'hell no'.

by NZChinese | 19th Oct 21, 11:00am 1634594443

I say it based on what I have experienced and observed. Right after the Asian Financial crisis, Helen Clark's Labour government opened the gate; that's when I came to NZ; after the GFC, Key's National government opened the gate. This time Covid may force NZ to close the gate temporarily. Still, it doesn't stop the government from granting 165k people who worked for the country since the beginning of the outbreak (in a way, I think NZ has shown appreciation to these people and taken a high moral ground). Once we connect to the world, young NZers will emigrate again, and immigration will happen again to offset the impact. Suppose you trace the policy changes back to the 1970s. In that case, you will find it is fundamentally why NZ immigration gradually changed from focusing on race/nationality to merit and skills.

Speaking of the end game, I think the property market booming will reach a stop when multi-generations need to invest in a single property, just like what happens in Germany. I don't know when we will get that thou.

by Wrong John | 19th Oct 21, 9:24am 1634588682

Interest rates going up. Good. About bloody time.

by mikekirk29 | 19th Oct 21, 9:59am 1634590775

Listen twice

scary stuff

https://mailchi.mp/wolfstreet.com/the-wolf-street-report-chinas-model-o…

by WestieAJ | 19th Oct 21, 10:10am 1634591408

Imagine if a few hundred Chinese investors have to liquidate their Auckland investments to make good on their commitments in China. What does that do to the Auckland market? Worse still if they have to make a choice about which properties to default on. The apartment in Auckland or the apartment in Shanghai.

by Carlos67 | 19th Oct 21, 1:22pm 1634602948

If I recall correctly there was a huge percentage of fixed home loans coming due about now. What I see is interest rates rising sharply but in effect this will not impact existing home owners for quite a few years, like 3 to 5 years because they have already locked in a low rate. 3 to 5 years will get them out of trouble because all things going the way they have, the house will be well out of the red and be worth yet another 20% over what it is now. For people that think house prices cannot keep rising, I think your wrong. Houses are hard assets and a basic requirement for a normal life as we now know it. You can take a pass on many things but shelter is only below food, water and air to breathe.

by brisket | 19th Oct 21, 1:29pm 1634603345

No one who needs a house is buying one without a mortgage. New mortgages are at the higher rates. There is already an effective decrease in how much FHBs can pay. Unless investors take up the slack, or wages rise commensurately to make up the difference, prices will fall.

by al123 | 19th Oct 21, 1:32pm 1634603540

You are right that houses are hard assets and a basic requirement for life as we know it. But why do you think that means that house prices must keep rising? Did houses cease to be hard assets and a basic requirement for life in Japan in the nineties and in Ireland and the US post-GFC?

by Brock Landers | 19th Oct 21, 8:38pm 1634629124

House prices are a function of the borrowing capacity of willing and able buyers.

There is very little else to it.