Do Rising Interest Rates Really Crash Property Prices?

📈 Do Rising Interest Rates Really Crash Property Prices? 

The Data Says Otherwise... 🔍🏡

Think rising rates always mean falling property values? Think again. In this episode of the Taylored Property Wealth Podcast, we unpack 3 major interest rate cycles across Australian history and the results will surprise you.

💥 From 2022–2025, rates jumped from 0.1% to 4%+…
Yet property markets showed strength:
📉 Melbourne: -5%
📈 Adelaide: +24%
📈 Brisbane: +16%
🚀 Perth: +37%

Even during the 2002–2008 hike to 7.25%, we saw:
🔥 Perth: +120%
🔥 Brisbane: +96%
🔥 Adelaide: +81%

These numbers destroy the myth that high interest rates = falling property prices.

🎯 Discover why some cities boom while others lag, even under the same economic pressure, and how savvy investors use this data to make smart moves.

With rate cuts on the horizon in 2025, this deep dive is a must-listen for anyone ready to capitalise on the next growth cycle.

🎧 Subscribe now to the Taylored Property Wealth Podcast for proven, data-led strategies to grow your portfolio with confidence.

Chapters

• 0:00 Introduction to Rate Rising Cycles
• 1:09 Recent Cycle: 2022-2025 Performance
• 2:29 2009-2010 Cycle Analysis
• 3:53 2002-2008 Extended Cycle Results
• 6:11 Growth Despite Rising Rates Summarized

Transcript

Speaker 1: 0:00

Welcome back to another episode of the Tailored Property Wealth Podcast. My name is Casey Taylor and I'm the host of the podcast, and in today's episode we are going to be talking about price growth and the correlation between that in an interest rate rising cycle and the last three interest rate rising cycles. So obviously, the most recent one 2022 to 2025, and the couple before that. And what is interesting to note is that, despite rates increasing during those periods of time, the property price growth has been strong. Okay, only a few locations have had corrections, and one of those locations has received 120% growth over that rate rising cycle. So let's get into it Now. Just to note the core logic figures for this, now known as cotality. All right, but that is where we're sourcing the data from for the locations in the price growth, the data from for the locations and the price growth. Alrighty. So the most recent rate rising cycle 2022 to 2025, we had Sydney rise 3% during that period of time. Nothing crazy. Melbourne it decreased 5% over that period of time. We know that Melbourne hasn't had its run over the last couple of years. Adelaide increased 24%, brisbane 16% and Perth 37% being the top performer. Now, during that period of time, we had May 2022, where we saw the first increase 0.25% and that was from a historic low of 0.1% up to 0.35%. And then, when that came to an end was the start of this year, the cash rate reduced 0.25% in February 2025 to 4.1%, and we've obviously experienced another rate reduction and at the start of July, at the time of recording, we're a week away essentially from an announcement on what the RBA will do for July and hopefully we see another rate reduction. As a borrower myself, and obviously what we do, it, uh, it positively influences what we do. All right.

Speaker 1: 2:29

Moving across to the previous rate rising cycle, october 2009 to 2010, now the cash rate increased 0.25, increasing to to 3.25% in October 2009,. Okay, now, in November 2010 is when that rate rising cycle continued, with the last one being 0.25% to 4.75%. Now, it did then hold for a period of time, essentially a year, before we saw a rate reduction, which was November 2011, dropping to 4.5%. Now, what did property prices do over that period of time Very short period of time as well, right? Only essentially a year between the first rate rise to the last rate rise and then sat flat for a period of time 7% for Sydney, melbourne, 11%, adelaide 6%, brisbane backwards 1% and Perth 3%. So, again for that period of time, despite it being a shorter period of time, there was only one capital city that went backwards in that period of time. Despite it being a shorter period of time, there was only one capital city that went backwards in that period of time Melbourne saw double-digit growth throughout that period of time.

Speaker 1: 3:53

Now the last one we're going to talk about, and it's actually a far larger timeframe six years, may 2002 to March 2008. Now we saw the cash rate increase 0.25% in May 2002, starting at 4.25% as the cash rate, and the last increase was in September 2008, which was a peak, to the cash rate of 7.25% before it went down 0.25% to 7%. So if we look at that period of time, it's a larger rate rising cycle, but the cash rate is significantly larger than what we've experienced over the last couple of years, and I remember three years ago everyone was losing their fucking mind going from 0.1 percent historic low and slowly increasing back to the three, the four percent which, based on long-term averages, is where the cash rate is. So it's funny how, how we can get so used to something being so low, but then, as soon as it changes, we do start to adapt quite quickly as well. Now here's the good part the cash rate is so high in comparison to some periods of time we've just experienced.

Speaker 1: 5:15

But over that six-year period there's been some phenomenal growth in some of these metro locations. So Sydney did 23% over that six-year period Nothing crazy, right? I wouldn't be happy if I purchased and in six years did that amount for that period of time, right? Melbourne 57%. Now we're talking we're getting a little bit better capital growth Adelaide 81%, brisbane 96% and Perth 120% growth. So in a very short period of time only six years there was some really solid capital growth Melbourne, adelaide, brisbane, perth, with Perth being the performer. So it just gives us a little bit of confidence as an investor that when rates are rising, yes, some areas might be affected, but there's going to be some areas that aren't affected and they're still going to grow, even if it's modest. However, on the flip side, when we're entering a period where we're seeing the cash rate reduce, it's positive for that environment that we're in.

Speaker 1: 6:22

That's not the only thing. Interest rates are not the only thing in. That's not the only thing. Interest rates are not the only thing. But if we look at other metrics and we can understand that. Simply, the borrowing and the cash flow is improving for borrowers, it's going to positively influence property prices and see them increase. Anyway, nice short one today and just talking about the cash rate and the historic cash rate relevant to property prices. I hope you enjoyed this one. It's always good to look back on data. Thanks for listening and we'll see you on the next episode.