O/T. Everyone seems to mention "until inflation is within range" then expect rate cuts,
What about the Years of high (over target) inflation?
Many items are over double what they would have been if inflation had have been kept in range.
Really negative inflation is required to get prices back to what they should have been,
If inflation had have been kept in range in the first place....
Some people will call this a recession,
Others a correction in the market.
Personally I do not care how high rates need to go to get prices,
especially House prices back to reasonable levels.
Back to the 3 times Average wage for an average House,
As it was in the "boomers" day seems like a fair target.
Irresponsibly low interest rates are part of the cause that raised prices to such crazy levels,
As people borrowed far more for the same repayments....
Anyhow as for some people crying cause they overpaid and bought the top,
Who really could not afford the rate increases,
The Bank said they could afford it,
So they have a pretty good come back there.
It seems banks were happy to lend to people who really could not afford the rate increases,
So some of the fault lies with them.
They also valued the properties at up to 50% more than what they were just 12 months earlier,
Which is also their fault, and makes the banks valuations look good at the same time.
Even though risk of defaults is much higher.
Anyhow interest rates averaged around 6.8% for the last 30 Years,
No one should have been given a Loan who could not afford those rates.
Now that they have been lower than average for so many years now,
It seems likely they will have to go far higher at some point,
So the sort of rates seen in the 90's will likely need to occur,'
or even be exceeded in this 30 year cycle....IMO....
