Why the Reserve Bank may be forced to review record-low interest rates

The biggest one-month jump in house prices in 17 years and surge in new home loans has prompted warnings the Australian property market is at risk of overheating.

It could force the Reserve Bank to review record-low interest rates.

It’s a stark contrast to what economists largely predicted this time last year.

Shane Oliver, chief economist at AMP, told Ross and Russel there was one big factor – JobKeeper.

“It basically meant we technically had a recession, the economy went backwards and unemployment went up but many people were kept in their jobs and kept with an income,” he explained.

“When you put that together with the bank payment holidays … normally when you have a recession, people lose their jobs and default on loans and it leads to a flood of property on the market and prices go down

“That hasn’t happened.”

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