In the absence of demand measures, house prices might continue to rise rapidly and pose an increasing risk to financial stability. The conventional mechanism to help restrain housing demand while working on the supply response would be to raise the Official Cash Rate (OCR), which would feed through directly into higher mortgage rates.
OMTs do not go beyond what is required in order to achieve these objectives. They are not only strictly linked to their objectives, their volume is also – as the European Central Bank indicated in the last oral hearing – limited in several respects.