Interest rates are the only remaining lever the Reserve has got...

Interest rates are the only remaining lever the Reserve has got towie. But the current governors seem to be led by a desire to return to the historic mean (which means around 8.5% to 9.5% home loan rates).

It's not just the rate that discourages borrowers, because few borrowers can really assess their ability to repay a loan, but the percentage of property values that banks will lend. When the housing market is looking precariously toppy, banks lower the percentage to 70% or less of property values. So the values recede because of borrowers inability to fund the gap, unless they are selling one property to buy another.

It's simplistic and plain selfish for the housing sector to determine interest rates, which effect all sectors of the economy. Why should business endure high rates and why should rural industries endure unfavourable exchange rates just to help homeowners afford real estate. Sensible people should just pay (record low) rent until the real estate market subsides due to lack of interest.

There are better and more targetted ways to cool the real estate market. Dropping off subsidies and increasing government charges for example, using the money for employment generating public enterprise.

This crap about cooling the real estate market through interest rate rises is stupid. Next thing you know, the geriatrics will have busted the whole economy.