No. If you want to see lower house prices in Australia, then all you need is a Reserve Bank with the guts to raise interest rates. Significantly lower prices are a certainty if the cash rate is raised to neutral levels of say, 2-2.5%. But the RBA has only just decided last week to move rates up from 0.1% to 0.35%, way slower than other central banks. You can't expect house price declines already when the cash rate was virtually at zero just a week ago. Interest rate movements take a few months to gain traction.
Whilst fixed rate mortgages have become much more expensive in recent months, borrowers can still get variable mortgage rates of just over 2%, as variable rate loans have hardly been impacted by movements in the cash rate to date. Once the cash rate is at 1-1.25%, then it's really going to bite. Because borrowers will be looking at 3-3.5% mortgage rates, whether they go fixed or variable. Loan rates of 2% will be a thing of the past. At that point the psychology of the housing market will be very different to that of last year and early this year.
Look at New Zealand, where their Reserve Bank has raised rates from near zero last year to 1.5% in April. Their national prices are down about 5%, with Auckland prices down more than 10%, (inner city Auckland down 19%) and those price movements are just since November last year.
In Canada, where their Central Bank has raised rates from near zero to 1.0% last month, prices are also dropping. Toronto prices have fallen 6.4% in one month - from March to April.
If you think interest rates don't have an effect on house prices, and other asset prices for that matter, you simply don't have a clue.
