The only reason real estate markets haven’t crashed is the record low, near zero, global interest rates. Phil Lowe was saying in late 2016 that the next move for interest rates will likely be up, not down. But he sat on his hands and watched like a deer in headlights as the US raised their rates until Dec 2018. The Dow tumbled over 20% in less than three months. Wall Street sooked to the Fed and Trump, who had over $300m of personal debt threatened Jay Powell that he’d sack him if he didn’t stop raising rates. At that point, without a single rate rise in Australia, Sydney and Melbourne top quartile suburbs were down between 20-30% from their peak in early-2018. A crash was imminent. Then Powell paused on rates and reversed course, starting to cut rates again by mid-2019. And so did our bookworm, Mr Lowe. And it’s only because of political pressure and zero interest rates that mug punters with no fkn idea, get to say ‘I told you property never falls’ and get to call legendary billionaire investors like Grantham clowns.
