why house prices are set to jump , page-6

Interest rates have been at sustained historical lows since the GFC and have fallen 75 basis points, yet it hasn't even created a flicker in the housing market in the last year.

IR falls will cushion the blow, but ZIRP is actually a bad thing. Most of the mature economies of the world are pursuing a ZIRP because their economies are completely stuffed. Our COMPARATIVELY high rate of interest is an indicator that our economy is COMPARATIVELY healthy.

That said i'd love to see an agressive cut so the AUD can fall. I don't think it will funnel into housing that much. People are tapped out in terms of debt. I think what you will see is an even bigger increase in the "savings" rate which is actually just people paying down their debt faster. House prices need growing debt to keep going up. I hope that doesn't happen as it will exacerbate any economic slowdown that occurs in the future. The best outcome for the economy is a drop in IR, a falling dollar and people paying down debt faster, NOT taking on more debt.