The hysteria about interest rate rises and the affect it will have on property prices needs to stop, according to leading business commentator, Terry McCrann.
McCrann says the reality is that the vast majority of homeowners are still sitting on huge tax-free capital gains as a result of property price growth in the past 10 years.
He says prices increased between 65% in Brisbane and 120% in Sydney along the east coast since 2011.
“So, if house prices have fallen 15%, and that’s by no means clear, Sydney prices would still be nearly 90% up on 2011 and Melbourne prices by nearly 60%,” he says.
McCrann says homes have increased in value well ahead of ordinary inflation.
“The overwhelming majority of people who go out to buy a property each weekend have either already cashed in a massive tax-free gain or are moving into investment properties off the back of massive unrealised gains on existing properties,” he says.
McCrann says the “hysteria” by commentators over the latest interest rate rise are way off the mark as basically borrowers have been lending “all-but free money’’ and are now borrowing “only slightly less than all-but free money”.
McCrann decried commentators and journalists who report on the current market using terms such as “free-fall” or “collapse” as that is far from reality.
“What is completely lost in their unhinged rantings is any sense of context or even basic arithmetic,” he says.
