Mecca Property Group

Do interest rates actually crash property prices? It's the question we get asked more than any other. And the data doesn't really support the fear.

Research from Longview maps Australian interest rates back to the sixties alongside median house prices and the points where property doubled in value.

The doubling events don't line up with low rates. They happen regardless. Rates at 17% in the eighties. Rates at 5 to 6% through the two thousands. Property kept doubling through all of it.

Five to six percent is normal. It just doesn't feel that way because we spent a decade at near zero. We're not in a high rate environment. We're back in a normal one.

The Australian property market has never really cared about rates. What it cares about is population. People keep moving here in serious numbers. For opportunity, lifestyle, schools, safety. That demand doesn't switch off because the cash rate moves half a percent.

Compare that to places like Japan or Italy where declining populations are creating the kind of property problem people incorrectly assume we have here. We don't have that problem.

Rates are a cost of doing business. One input among many. Supply, population growth, infrastructure, lifestyle appeal, these are what drive Australian house prices over the long run.

The data doesn't lie. It just rarely gets talked about as much as the fear does.

Earlier this week we got a room full of investors, buyers and curious minds together for Coffee, Property & Finance in South Melbourne, all sitting with the same question that’s been on a lot of people’s minds lately. Where do you actually put your money when the world won’t settle down?

What came out of the conversation was that uncertainty isn’t really the enemy. Standing still is. The people who tend to come out ahead aren’t the ones waiting for the perfect moment, they’re the ones staying informed and making calculated decisions while everyone else hesitates. That played out across everything we touched on, from the property market to finance to the wider economic picture.

A big thank you to everyone who came out, asked real questions and stuck around well after the night wrapped up. Nights like this only work because of the people in the room.

This was the first of many, so if you missed this one, there’ll be another chance soon.