Episode Details

There were some significant changes regarding the RBA recently.

Philip Lowe's term as Reserve Bank governor was not renewed which means he's been effectively sacked as Reserve Bank governor's current Deputy Governor; Michele Bullock will become Governor starting 18 September.

Regular listeners would know that I record a weekly video with Dr. Andrew Wilson, and this is the audio of last week's Property Insider video.

So, let's hear what Andrew Wilson has to say about the sacking of Dr. Phillip Lowe. Andrew will also be discussing some of his latest data and if you are keen to see the charts, I will leave a link in the show notes so you can see them.

Today Dr. Wilson,delves into the intricacies of housing markets, bank policies, and the effects of recent changes at the Reserve Bank. Topics discussed include data on property trends across capital cities, the impact of the Reserve Bank of New Zealand's macro-prudential policies on the housing market, the trend of no interest rate changes despite a weakened economy, and the potential implications of the post-COVID stimulus package on inflation.

The episode also evaluates the performance of housing markets in specific regions, discusses current market trends, and provides an outlook on the property market and its likely trajectory.

In today's show we discuss…

● Analysis of Reserve Bank Governor Philip Lowe's mistakes and lessons for Deputy Governor Michelle Bullock

o There was a misplaced obsession with the housing markets

o The RBA supported "experimental" macro prudential policies between 2015 and 2018 which led to the supply side challenges their property markets are currently experiencing as well as skyrocketing rents.

o Interest rates were kept on hold in 2016 - 17 despite a weakening economy when many jobs were being lost as the RBA didn't lower rates as it was still concerned about our housing market.

o However, interest rates will slash in the second half of 2019.

o Under Dr Lowe's watch bank margins rose significantly with some suggesting they were gouging on the changing rates, even though this isn't really under the RBA control.

o Who can forget the post-COVID message "There will be no rate rises until 2024", which led many homebuyers and investors to take on significant borrowings at artificially low interest rates.

o Dr. Lowe has a poor record