What would another rate rise do to home values? It's complicated
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What would another rate rise do to home values? It’s complicated

As talk of a rate cut before the end of the year quietens, another rate rise may be on the horizon

By Bronwyn Allen
Thu, Jul 4, 2024 10:03amGrey Clock 3 min

Australian home values rose by 8 percent over FY24 despite the impact of 13 interest rate rises between May 2022 and November 2023 putting immense strain on household budgets. A lack of supply of homes for sale amid strong buyer demand trumped the usual dampening effect of higher rates in FY24. Additionally, strong jobs and population growth coupled with relative affordability turbocharged home values in the two bestperforming capital city markets of Perth and Brisbane, where median prices lifted 23.6 percent and 15.8 percent, respectively, in FY24.

CoreLogic’s head of research Eliza Owen notes that when interest rates began to rise in May 2022, there was a peak-to-trough 7.5 percent fall in the Australian median home price before a new growth cycle began in early 2023. Since then, there have been 17 consecutive months of growth. Property values in Sydney, Brisbane, Adelaide and Perth are now at record highs, having recovered all their losses in the downturn of 2022. Regional Queensland, South Australia and Western Australia are also at record-high median values.

There are a few explanations for why housing values have continued to rise even as the cost of debt has risen, and borrowing capacity has eroded,” Ms Owen said. Tight labour market conditions and an accumulation of savings through the pandemic have broadly underpinned mortgage serviceability, mitigating a need to sell as rates have increased, the construction sector remains squeezed, and unable to deliver a large backlog of dwellings, and strong population growth has increased demand for housing, both for purchase and rent.

The composition of buyers may also be propping up purchases, with higher deposit sizes indicating the current buyer profile may be less debt-dependent than when interest rates were at record lows,” she said.

Many first home buyers have higher deposits because of the Bank of Mum and Dad. Additionally, data from property settlement company PEXA shows one in four sales across the eastern states in 2023 were cash sales to buyers not purchasing with debt, who were therefore unaffected by higher mortgage rates. Such buyers included downsizing baby boomers and high-income earners and foreign investors in the prestige sector.

For most of this year, interest rate cuts have been anticipated due to falling inflation, which may have also stoked some buyer enthusiasm, Ms Owen said. However, recent data indicates inflation may be stickier than expected as it nears the Reserve Bank’s target band of two to three percent. As a result, some economists now expect at least one more rate rise to keep inflation on a downward course.

“Another rate rise would slow housing demand, and some cracks are already showing,” Ms Owen said. “Despite resilience in the headline numbers, there are some suggestions that demand is already weakening. Another 25 basis point rise in the cash rate in August, all else being equal, would take monthly repayments on the current median dwelling value to over $4,000 per month.

Not only is this further out of reach for prospective buyers, it would likely also represent a further blowout in the premium of holding a mortgage relative to renting. The bigger that premium becomes, the weaker demand for purchases may become relative to renting, despite rent growth still sitting well above average.

The Reserve Bank released the minutes of the board’s June meeting on Tuesday. In its deliberations, the board noted that the narrow path to returning inflation to target by 2026 “was becoming narrower” and recent economic data “reinforced the need to be vigilant to upside risks to inflation”. The board also noted that the extent of uncertainty at present meant it was difficult to rule in or rule out future changes in the cash rate target”.



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Everyone Wants a Room Where They Can Escape Their Screens

Weary of ‘smart’ everything, Americans are craving stylish ‘analog rooms’ free of digital distractions—and designers are making them a growing trend.

By NORA KNOEPFLMACHER
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James and Ellen Patterson are hardly Luddites. But the couple, who both work in tech, made an unexpectedly old-timey decision during the renovation of their 1928 Washington, D.C., home last year.

The Pattersons had planned to use a spacious unfinished basement room to store James’s music equipment, but noticed that their children, all under age 21, kept disappearing down there to entertain themselves for hours without the aid of tablets or TVs.

Inspired, the duo brought a new directive to their design team.

The subterranean space would become an “analog room”: a studiously screen-free zone where the family could play board games together, practice instruments, listen to records or just lounge about lazily, undistracted by devices.

For decades, we’ve celebrated the rise of the “smart home”—knobless, switchless, effortless and entirely orchestrated via apps.

But evidence suggests that screen-free “dumb” spaces might be poised for a comeback.

Many smart-home features are losing their luster as they raise concerns about surveillance and, frankly, just don’t function.

New York designer Christine Gachot said she’d never have to work again “if I had a dollar for every time I had a client tell me ‘my smart music system keeps dropping off’ or ‘I can’t log in.’ ”

Google searches for “how to reduce screen time” reached an all-time high in 2025. In the past four years on TikTok, videos tagged #AnalogLife—cataloging users’ embrace of old technology, physical media and low-tech lifestyles—received over 76 million views.

And last month, Architectural Digest reported on nostalgia for old-school tech : “landline in hand, cord twirled around finger.”

Catherine Price, author of “ How to Break Up With Your Phone,” calls the trend heartening.

“People are waking up to the idea that screens are getting in the way of real life interactions and taking steps through design choices to create an alternative, places where people can be fully present,” said Price, whose new book “ The Amazing Generation ,” co-written with Jonathan Haidt, counsels tweens and kids on fun ways to escape screens.

From both a user and design perspective, the Pattersons consider their analog room a success.

Freed from the need to accommodate an oversize television or stuff walls with miles of wiring, their design team—BarnesVanze Architects and designer Colman Riddell—could get more creative, dividing the space into discrete music and game zones.

Ellen’s octogenarian parents, who live nearby, often swing by for a round or two of the Stock Market Game, an eBay-sourced relic from Ellen’s childhood that requires calculations with pen and paper.

In the music area, James’s collection of retro Fender and Gibson guitars adorn walls slicked with Farrow & Ball’s Card Room Green , while the ceiling is papered with a pattern that mimics the organic texture of vintage Fender tweed.

A trio of collectible amps cluster behind a standing mic—forming a de facto stage where family and friends perform on karaoke nights. Built-in cabinets display a Rega turntable and the couple’s vinyl record collection.

“Playing a game with family or doing your own little impromptu karaoke is just so much more joyful than getting on your phone and scrolling for 45 minutes,” said James.

The Patterson family’s basement retreat ‘encapsulates the joy in the things that we love in one room.’ John Cole

Screen-Free ‘Escapes’

“Dumb” design will likely continue to gather steam, said Hans Lorei, a designer in Nashville, Tenn., as people increasingly treat their homes “less as spaces to optimise and more as spaces to retreat.”

Case in point: The top-floor nook that designer Jeanne Hayes of Camden Grace Interiors carved out in her Connecticut home as an “offline-office” space.

Her desk? A periwinkle beanbag chair paired with an ottoman by Jaxx. “I hunker down here when I need to escape distractions from the outside world,” she explained.

“Sometimes I’m scheming designs for a project while listening to vinyl, other times I’m reading the newspaper in solitude. When I’m in here without screens, I feel more peaceful and more productive at the same time—two things that rarely go hand in hand.”

A subtle archway marks the transition into designer Zoë Feldman’s Washington, D.C., rosy sunroom—a serene space she conceived as a respite from the digital demands of everyday life.

Used for reading and quiet conversation, it “reinforces how restorative it can be to be physically present in a room without constant input,” the designer said.

Laura Lubin, owner of Nashville-based Ellerslie Interiors, transformed a tiny guest bedroom in her family’s cottage into her own “wellness room,” where she retreats for sound baths, massages and reflection.

“Without screens, the room immediately shifts your nervous system. You’re not multitasking or consuming, you’re just present,” said Lubin.

As a designer, she’s fielding requests from clients for similar spaces that support mental health and rest, she said.

“People are overstimulated and overscheduled,” she explained. “Homes are no longer just places to live—they’re expected to actively support well-being.”

Designer Molly Torres Portnof of New York’s DATE Interiors adopted the same brief when she designed a music room for her husband, owner of the labels Greenway Records and Levitation, in their Lido Beach, N.Y. home. He goes there nightly to listen to records or play his guitar.

The game closet from the townhouse in “The Royal Tenenbaums”? That idea is back too, says Gachot. Last year she designed an epic game room backed by a rock climbing wall for a young family in Montana.

When you’re watching a show or on your phone, “it’s a solo experience for the most part,” the designer said. “The family really wanted to encourage everybody to do things together.”

Photo: John Cole

Analog Accessories

Don’t have the space—or the budget—to kit out an entire retro rec room?

“There are a lot of small tweaks you can make even if you don’t have the time, energy or budget to design a fully analog room from scratch,” said Price.

Gachot says “the small things in people’s lives are cues of what the bigger trends are.”

More of her clients, she’s noticed, have been requesting retrograde staples, such as analog clocks and magazine racks.

For her Los Angeles living room, chef Sara Kramer sourced a vintage piano from Craigslist to be the room’s centerpiece, rather than sacrifice its design to the dominant black box of a smart TV. Alabama designer Lauren Conner recently worked with a client who bought a home with a rotary phone.

Rather than rip it out, she decided to keep it up and running, adding a silver receiver cover embellished with her grandmother’s initials.

Some throwback accessories aren’t so subtle. Melia Marden was browsing listings from the Public Sale Auction House in Hudson, N.Y. when she spotted a phone booth from Bell Systems circa the late 1950s and successfully bid on it for a few hundred dollars.

“It was a pandemic impulse buy,” said Marden.

In 2023, she and her husband, Frank Sisti Jr., began working with designer Elliot Meier and contractor ReidBuild to integrate the booth into what had been a hallway linen closet in their Brooklyn townhouse.

Canadian supplier Old Phone Works refurbished the phone and sold them the pulse-to-tone converter that translates the rotary dial to a modern phone line.

The couple had collected a vintage whimsical animal-adorned wallpaper (featured in a different colourway in “Pee-wee’s Playhouse”) and had just enough to cover the phone booth’s interior.

Their children, ages 9 and 11, don’t have their own phones, so use the booth to communicate with family. It’s also become a favorite spot for hiding away with a stack of Archie comic books.

The booth has brought back memories of meandering calls from Marden’s own youth—along with some of that era’s simple joy. As Meier puts it: “It’s got this magical wardrobe kind of feeling.”

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