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Article  It's not a bubble-burster, just a switch to normal
Comment by Ross Gittins November 6, 2003  Printer friendly
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If the mug punters still leaping into negatively geared property
investments conclude the Reserve Bank is intent on bursting the
housing bubble by jacking up interest rates, governor Ian
Macfarlane will be well pleased.  The truth, however, is less
dramatic. While Mr Macfarlane would be delighted to see a
slowing in the rate at which people are borrowing for housing -
particularly rental housing - he's unlikely to believe the
modest rate rises he has in mind would be sufficient to stop the
boom in its tracks.  We can expect another 0.25 percentage point
rate increase in a month's time and probably a further one early
next year but, on present indications, not much more than that.
Why not? Because interest rates affect the whole economy, not
just housing, and you can't