Get ready for housing upheaval

Independent economist Tony Alexander says it is important if interest rates rise to a level borrowers do not expect.

Alexander says the best outcome is if the pace of house price increases slows to below 10% a year from now, especially if interest rates rise.

“If, come March 2022, house prices are rising still at a pace above 10% per annum, the Government will hit investors’ expense deductibility again, then again until the buying subsides, and average price rises settle about 5% a year.

“At no stage has the Government said it wants house prices to decline.”