Interest rates could RISE again over the next 6 months. Does that actually mean Australian property prices will FALL everywhere?
History suggests it’s not that simple.
What History Says About Interest Rates and House Prices
Australian house prices have doubled 7 times over the past 6 decades, through periods of rising, falling and stable interest rates.
1988: A 15% Cash Rate and 31% Growth
But what about in the same year that rates spiked?
Well, in 1988, the RBA cash rate was 15%, yet Australian home values surged 31% that year.
High interest rates don’t automatically mean falling property prices.
But what will happen this time round?
Two Forces That Matter as Much as Interest Rates
There are two other major forces investors shouldn’t ignore.
Population growth
Australia’s population is currently around 28 million, with projections suggesting it could reach 31.5 million by 2035.
That’s millions of additional people needing somewhere to live.
Housing construction is falling behind
The government’s target of 1.2 million new homes by 2030 is looking increasingly difficult to achieve.
And two of the worst performing jurisdictions relative to their housing construction targets are:
- Northern Territory
- Tasmania
When construction falls behind population growth, housing shortages can intensify, even if interest rates remain elevated.
Where Prices Are Still Rising in Tasmania
We’re already seeing property market strength across parts of Tasmania, including:
➡️ Devonport
➡️ Launceston
➡️ Burnie
➡️ Romaine and surrounding northwest Tasmania
The Lesson for Property Investors
The lesson?
Don’t assume rising interest rates automatically mean falling property prices.
Yes, in many parts of Australia housing will slump. But in many areas it’s quite the oppposite.
Supply and demand, population growth and local market fundamentals matter enormously.
Some Australian markets will decline while others will continue growing strongly.
Would you hold off buying property because interest rates might rise, or would you buy now if the suburb data looked strong?
Book a Free Discovery Call With Realta with PK
If you would like to understand which markets our research team is currently active in and whether a property in Melbourne or elsewhere in Australia makes sense for your situation right now, book a free 60-minute Discovery Call with our team.
There is no obligation and no cost. Just an honest conversation about your goals, your budget and what the data actually shows about where the best opportunities are right now.
Co-Founder | The Educator & Mentor
I’m also a property investor with a $27m+ debt-free portfolio of residential & commercial property, generating over $300k+ net annual passive income.
I help people from all over Australia, by accessing a unique strategy that combines high growth high cashflow residential property, alongside highly profitable property development projects to help accelerate their passive income. I typically work with families, young over-achievers, and new Buyers Agents who want a predictable, DATA-led system to grow wealth and Passive Income.