It is true that the worldwide fall in interest rates over the past two decades has caused a runaway boom in house prices; however, when demand for something rises, the only sane, logical response is to make more of it. /Robin Harding, FT, 7 April 2021/
I also fully agree with New Zealand’s rebelling central bank that does not consider the impact of housing when setting monetary policy.
Nevertheless, to build more, larger and green homes we need both, free market response and targeted means from the state. We must create a completely new green market for housing via special government projects and targeted central bank’s programs.
In order to complete the job, central banks need a new mandate to help all players who decide to contribute to a long-term sustainable economy.
Governor Matolcsy, MNB, the Central Bank of Hungary
Re “Central banks should not target house prices”
