Graph 2  Real mortgage interest rate (Mortgage interest rate less ex-post house price inflation)  %  %  16  16 14  NZ  14  12  Australia  12  10  10  8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4 -6  -6 1990  1991  1992  1993  1994  1995  1996  1997  Living with low inflation Let’s peel this back further.
Why did property inflation continue in the 1990s? We achieved price stability measured by the CPI in 1991. Those representing both sides of wage negotiations quickly understood what that meant.