You just told me ir dont drive property prices and told me "No Im wrong"
Whatever reason banks have for raising rates and Id say with certainty the short version is to protect their margins and to make more profit it is the rates that drive the prices and has been for about the last 30 or 40 years. It will be rates that collapse the property market this time as well. This is the reason the RBA is very frightened about raising rates and even the head of the RBA has said that rates have inflated asset prices.
The RBA and the US FED have been sidelined on raising rates as the banks in the US and Australia have been raising rates by themselves. If you follow the news you would probably have seen the crap fight between the government and banks raising rates.
This time around it will be far worse because of the household debt load and the fact that properties were bought using two incomes.
To be realistic Australia would have been better off if the RBA had left rates up around 3 - 4 % then the mortgage rates would have stabilised at somewhere around 5 -6%.
In the US right now bank mortgage rates are around 4 to 4.5% which is about to impact the property market if they go another one percent.
The US market is right now being impacted by the two biggest Chinese property corporations selling their property at fire sale prices and they have a lot of properties.
I might add that in the 80's we were earning about 14 to 16% percent interest on cash in the bank.
