economy Australia
Study links interest-rate rises to lower Australian home ownership
5%
A typical 0.25 percentage point increase in interest rates causes an immediate decline in home purchases.
Modelling by James Graham and Avish Sharma suggests that interest-rate increases reduce home purchases and lower Australia's home ownership rate, with recovery potentially taking more than a decade.
1 sourceabc.net.auUpdated
Claims
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- 5%
A typical 0.25 percentage point increase in interest rates causes an immediate decline in home purchases.
“a typical 0.25 percentage point increase in interest rates causes an immediate 5 per cent decline in home purchases”
Home purchases remain lower for up to two years after an interest-rate increase.
“The research finds buying remains lower for up to two years following the rate increase.”
- 0.1percentage points
The home ownership rate declines within weeks of an interest-rate increase.
“a decline in the home ownership rate of 0.1 percentage point within weeks of the rate rise”