{"id":185646,"date":"2024-10-13T16:30:11","date_gmt":"2024-10-13T05:30:11","guid":{"rendered":"https:\/\/propertyupdate.com.au\/?p=185646"},"modified":"2024-09-19T15:39:30","modified_gmt":"2024-09-19T05:39:30","slug":"when-the-cure-kills-the-patient","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/when-the-cure-kills-the-patient\/","title":{"rendered":"When the cure kills the patient"},"content":{"rendered":"

When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders.<\/p>\n

And if all else fails, it raises our body temperature until the enemy has been destroyed.<\/p>\n

It\u2019s very similar to how the RBA is fighting the disease of inflation with high interest rates.<\/p>\n

Using higher temperatures to fight disease is a risky strategy because there can only be one winner \u2013 either the disease is killed, or we die.<\/p>\n

In the same way, the RBA runs a risk that higher interest rates will kill the economy before inflation is brought down.<\/p>\n

In fact, there is mounting evidence high interest rates are stifling the economy, with the latest ABS figures showing that our economy grew by just 0.2% in the June Quarter.<\/p>\n

The only reason that we are not already in recession is because of the huge numbers of overseas arrivals who are fuelling buyer demand.<\/p>\n

Put simply, each of us is spending less, but because more people are spending, our economy is still in growth.<\/p>\n

These migrants do, however, also create more demand for housing.<\/p>\n

The rental shortage in inner urban areas is getting worse<\/span><\/h2>\n

New arrivals (at least initially) are nearly all renters, and because they prefer to rent in the high-density inner urban areas of our major cities, asking rents and rental yields in those locations are shooting up.<\/p>\n

This table shows you some of these locations in Sydney, Melbourne, Adelaide and Perth, where current rental yields for units are over six per cent, despite unit rents rising by more than ten per cent per annum.<\/p>\n

\"Inner<\/p>\n

Cutting back overseas arrival numbers is not the solution<\/span><\/h2>\n

While we need overseas arrivals to keep the economy in growth, the downside is that they are directly responsible for the rapid rise in inner urban unit rents.<\/p>\n

This could motivate the Federal Government to address the housing shortage and escalate asking rents by cutting the intake of overseas migrants.<\/p>\n

This would be a terrible miscalculation as it would guarantee a quick economic slide into recession.<\/p>\n

Instead of trying to kill the economy, the RBA should be caring for the economy<\/span><\/h2>\n

Our current inflation rate is a direct result of the massive borrowing and money printing programs that the government embarked on during the pandemic years to keep the economy afloat.<\/p>\n

While there is no doubt that this was necessary at the time, it was always going to result in inflation.<\/p>\n

Over time, the rate of inflation will keep falling as the impact of all that money pumped into the economy dissipates.<\/p>\n

There is, however, a proven link between interest rates and economic growth as this graph shows.<\/p>\n

\"Housing<\/p>\n

Every period of higher-than-usual interest rates has resulted in economic slowdowns (1975, 1996, 2008) or recessions (1982, 1990).<\/p>\n

The data for the last two years shows that we are heading for an economic recession.<\/p>\n

Lower interest rates are the only solution<\/span><\/h2>\n

There is simply no need for the RBA to try and speed up the process of lowering inflation with a \u201ckill or cure\u201d strategy.<\/p>\n

As the data shows, it\u2019s high time that the RBA turned its attention instead to caring for the economy by reducing interest rates.<\/p>\n

Lower rates will not only encourage economic growth, they will turn housing into a more viable option for both investors and developers.<\/p>\n

This will increase the supply of rental stock and new housing and reduce the upward pressure on rents.<\/p>\n

<\/div>\r\n
<\/div>\n","protected":false},"excerpt":{"rendered":"

When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders. And if all else fails, it raises our body temperature until the enemy has been destroyed. It\u2019s very similar to how the RBA is fighting the disease of inflation with high interest rates. Using higher temperatures to…<\/p>\n","protected":false},"author":42,"featured_media":179637,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[54,3],"tags":[],"class_list":["post-185646","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-property-updates","category-property-investment"],"acf":[],"yoast_head":"\nWhen the cure kills the patient<\/title>\n<meta name=\"description\" content=\"When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders. And if all else fails, it raises our body...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When the cure kills the patient\" \/>\n<meta property=\"og:description\" content=\"When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders. And if all else fails, it raises our body...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/\" \/>\n<meta property=\"og:site_name\" content=\"Property Update\" \/>\n<meta property=\"article:published_time\" content=\"2024-10-13T05:30:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-09-19T05:39:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2000\" \/>\n\t<meta property=\"og:image:height\" content=\"1333\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"John Lindeman\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/propertyupdate.com.au\/when-the-cure-kills-the-patient\/\",\"url\":\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/\",\"name\":\"When the cure kills the patient\",\"isPartOf\":{\"@id\":\"https:\/\/propertyupdate.com.au\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg\",\"datePublished\":\"2024-10-13T05:30:11+00:00\",\"dateModified\":\"2024-09-19T05:39:30+00:00\",\"author\":{\"@id\":\"https:\/\/propertyupdate.com.au\/#\/schema\/person\/305583f60f25a5384d880d78b6542b5d\"},\"description\":\"When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders. And if all else fails, it raises our body...\",\"breadcrumb\":{\"@id\":\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#primaryimage\",\"url\":\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg\",\"contentUrl\":\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg\",\"width\":2000,\"height\":1333,\"caption\":\"Property Value\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/propertyupdate.com.au\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"When the cure kills the patient\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/propertyupdate.com.au\/#website\",\"url\":\"https:\/\/propertyupdate.com.au\/\",\"name\":\"Property Update\",\"description\":\"Real Estate Investing Advice & Strategies From Experts You Can Trust\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/propertyupdate.com.au\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/propertyupdate.com.au\/#\/schema\/person\/305583f60f25a5384d880d78b6542b5d\",\"name\":\"John Lindeman\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/propertyupdate.com.au\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/propertyupdate.com.au\/wp-content\/uploads\/2016\/09\/cropped-John-Lindeman-96x96.png\",\"contentUrl\":\"https:\/\/propertyupdate.com.au\/wp-content\/uploads\/2016\/09\/cropped-John-Lindeman-96x96.png\",\"caption\":\"John Lindeman\"},\"description\":\"John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.\",\"sameAs\":[\"https:\/\/lindemanreports.com.au\/\"],\"url\":\"https:\/\/propertyupdate.com.au\/author\/johnlindeman\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"When the cure kills the patient","description":"When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders. And if all else fails, it raises our body...","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/","og_locale":"en_US","og_type":"article","og_title":"When the cure kills the patient","og_description":"When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders. And if all else fails, it raises our body...","og_url":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/","og_site_name":"Property Update","article_published_time":"2024-10-13T05:30:11+00:00","article_modified_time":"2024-09-19T05:39:30+00:00","og_image":[{"width":2000,"height":1333,"url":"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg","type":"image\/jpeg"}],"author":"John Lindeman","twitter_card":"summary_large_image","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/propertyupdate.com.au\/when-the-cure-kills-the-patient\/","url":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/","name":"When the cure kills the patient","isPartOf":{"@id":"https:\/\/propertyupdate.com.au\/#website"},"primaryImageOfPage":{"@id":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#primaryimage"},"image":{"@id":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#primaryimage"},"thumbnailUrl":"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg","datePublished":"2024-10-13T05:30:11+00:00","dateModified":"2024-09-19T05:39:30+00:00","author":{"@id":"https:\/\/propertyupdate.com.au\/#\/schema\/person\/305583f60f25a5384d880d78b6542b5d"},"description":"When germs attack our bodies, our immune system quickly goes into action to repel or destroy the invaders. And if all else fails, it raises our body...","breadcrumb":{"@id":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#primaryimage","url":"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg","contentUrl":"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2023\/11\/property-value.jpg","width":2000,"height":1333,"caption":"Property Value"},{"@type":"BreadcrumbList","@id":"https:\/\/lindemanreports.com.au\/when-the-cure-kills-the-patient\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/propertyupdate.com.au\/"},{"@type":"ListItem","position":2,"name":"When the cure kills the patient"}]},{"@type":"WebSite","@id":"https:\/\/propertyupdate.com.au\/#website","url":"https:\/\/propertyupdate.com.au\/","name":"Property Update","description":"Real Estate Investing Advice & Strategies From Experts You Can Trust","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/propertyupdate.com.au\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/propertyupdate.com.au\/#\/schema\/person\/305583f60f25a5384d880d78b6542b5d","name":"John Lindeman","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/propertyupdate.com.au\/#\/schema\/person\/image\/","url":"https:\/\/propertyupdate.com.au\/wp-content\/uploads\/2016\/09\/cropped-John-Lindeman-96x96.png","contentUrl":"https:\/\/propertyupdate.com.au\/wp-content\/uploads\/2016\/09\/cropped-John-Lindeman-96x96.png","caption":"John Lindeman"},"description":"John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.","sameAs":["https:\/\/lindemanreports.com.au\/"],"url":"https:\/\/propertyupdate.com.au\/author\/johnlindeman\/"}]}},"_links":{"self":[{"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/posts\/185646","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/users\/42"}],"replies":[{"embeddable":true,"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/comments?post=185646"}],"version-history":[{"count":0,"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/posts\/185646\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/media\/179637"}],"wp:attachment":[{"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/media?parent=185646"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/categories?post=185646"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/propertyupdate.com.au\/wp-json\/wp\/v2\/tags?post=185646"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}