Media Release

What 2018 has in store for interest rates and house prices

December 27, 2017

Fraught as it is to make predictions, it’s that time of year, when taking a stab at what 2018 will hold is expected of business columnists.

Rather than forecast  where the stock market will travel in 2018 – because that is way too dangerous – of even where commodities will go – which would be another perilous pursuit – I will confine my crystal-ball gazing to house prices and interest rates.

In 2017, we saw definitive signs of a change in direction on residential dwelling prices. After some false starts there is clear evidence that the property market is cooling.

We should expect this to continue in 2018 but at this stage there are no immediate signs of the property bubble bursting and a crash in prices.

CoreLogic is also a member of the growing band of experts that don’t see an interest rate rise coming in 2018.

I agree with them but would go one step further and predict that we won’t see interest rates rises for at least the first half of 2019, given there is little prospect of inflation and wages growth in the short term.

National Australia Bank economists are looking for two rate rises in 2018 – one in the middle and one towards the end.

At the other end of the spectrum, Westpac sees no rate movement in 2018.

(Source: Elizabeth Knight,, 27 Dec 2017)



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