-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI Podcasts -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
MNI Research
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
-
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI BRIEF: RBA Says Expensive Home Prices To Fall Most
The Reserve Bank of Australia’s head of Domestic Markets, Jonathan Kearns, said houses in expensive suburbs are the most sensitive to interest rate changes, adding that apartments are less likely to suffer price swings than houses. He attempted to downplay modelling contained in the Bank’s April Financial Stability Review that showed a 15% decline in house prices based on a 200 bps increase in rates, saying “it was not actually a prediction” but rather an estimate of the sensitivity of house prices to interest rates.
However, Kearns said its user-cost model showed that if interest rates were 200 bps higher “forever” then house prices would end up being 30% lower than if interest rates had not changed. However, if interest rate reverted to their initial levels after two years, then the interest rate impact would unwind. Governor Philip Lowe last week said he would not be surprised if home prices fell a “cumulative” 10%.
Kearns partly attributed the higher interest rate sensitivity of houses, rather than apartments, to a limited supply of available zoned land for apartments. Expensive home prices were viewed as more "cyclical". He said RBA modelling showed falls in commercial property prices in response to higher interest rates were slower and smaller in magnitude than residential property. More insight into the impact of higher interest rates on borrowers would be provided in the Financial Stability Review to be released on Oct 7.
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.