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Housing Interest Rate Deregulation and the Campbell Report*
Author(s) -
ALBON ROBERT,
PIGGOTT JOHN
Publication year - 1983
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1983.tb00582.x
Subject(s) - deregulation , interest rate , economics , market rate , argument (complex analysis) , supply and demand , monetary economics , financial economics , finance , market economy , macroeconomics , market price , biochemistry , chemistry
It is argued that deregulation of housing interest rates would, under plausible assumptions, substantially increase the cost of housing finance in Australia, contrary to the impression created by the Final Report of the Australian Financial System Inquiry (the Campbell Report). Characteristics of the market for owner‐occupier housing finance, on both the demand and supply sides, suggest that the deregulated market rate will be approximately equal to the uncontrolled rate under regulation. The weighted average interest rate for owner‐occupier housing finance at December 1981 is more than three percentage points below the uncontrolled rate. The authors conclude that while this result does not of itself constitute an argument against deregulation, it does imply that deregulation would have a substantial distributional impact .