Although the number of people using the extremely low interest rate has gone up, Greg Jericho observes that investors have moved in in greater numbers. This is not driven by market forces, he adds. It is driven by a government bent on driving up property prices (The Guardian 6 May 2021). How long can this last when actual incomes remain subdued?
With ongoing record low interest rates and government desires to support the market come what may, Australians are taking out home loans in record numbers and as a result house prices look set to keep rising across the country.
If you had any doubt that Australia’s housing market is driven more by governments than actual market forces, you need look no further than the latest housing finance data that shows despite a year in which unemployment soared, and the economy staggered, the number of new mortgages taken out in March was 55 percent higher than it was in March last year.
It is not often that monthly economic data makes you look agog. But the latest lending finance data reveals just how insane the housing market has become around the nation.
So absurd it is that the value of home loans taken out in Western Australia in March was nearly double the amount taken out in March last year: